The Castillo Group, LLC has answers to "Frequently Asked Questions"


	The Castillo Group, LLC is always eager to handle any inquiries you might have about appraisals in Tucson and Pima County. Contact us today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons a person would require services from The Castillo Group, LLC?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, what assurance is there that the value conclusion is veritable?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Pima County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
Define "Market Value"
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Top)

An appraisal report is an evaluation leading to an opinion of value. The appraiser will use a few "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a home; it involves concluding what the improvements would cost minus physical deterioration, plus the land value. The Sales Comparison Approach involves searching for similar houses nearby and discerning value based on making a comparison of those houses to the house in question. Being the most popular approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residence. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (Top)

An appraiser provides a fair and credible assessment of market value, often in the context of a real estate sale. Appraisers document their professional conclusions in appraisal reports.

What are the reasons a person would require services from The Castillo Group, LLC? (Top)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

If you are applying for a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove insurance.
To fight inflated property taxes.
To deal with an estate.
To give you an edge when purchasing real estate.
To figure out the most probable sales price when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every home.
If you are ever involved in a lawsuit.

If you need a more detailed explanation of the appraisal process, please click here.

Is an appraisal the same as a home inspection? (Top)

Home inspectors do not generate an opinion of value and do not do appraisal reports. The point of a home inspection is to evaluate the structure of the property from foundation to rooftop. For the most part, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Top)

To be blunt, it's night and day. The CMA utilizes market trends to generate most of their business. An appraisal utilizes comparable sales that can be verified by records. Also, the appraisal checks other factors like condition, location and construction prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who made a career on valuing properties in and around Pima County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat sum for assignments, regardless of their value conclusion.

What are the contents of an appraisal report? (Top)

Each appraisal must indicate a credible estimate of value and must document the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used while working up the assignment.

For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value conclusion is veritable? (Top)

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis utilized in the appraisal was suitable.

Whether individually or collectively, there were no significant errors contained in the appraisal, nor any relevant details left out.

That appraisal services were not executed in a careless or negligent fashion.

That a credible, defensible appraisal report was conferred.

There are rigorous education and experience requirements that must be met in order to achieve the status of "licensed appraiser" in Arizona. Plus, appraisers must obey a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and practical experience. Once an appraiser is licensed, he/she is required to take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Top)

Most of the time, appraisers are employed by mortgage lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Pima County or other areas? (Top)

One of the main tasks an appraiser engages in is to assimilate property data. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is received from a numerous sources. To find out about recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.

Why do I need a professional appraisal? (Top)

An appraisal is a valuable tool anytime your home's value is pertinent to a financial decision. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from The Castillo Group, LLC is the best documentation to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Top)

PMI stands for Private Mortgage Insurance. This additional plan protects the lender if a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than The Castillo Group, LLC when it comes to analyzing real estate appreciation in Tucson and Pima County. Contact us today.

Do you need anything from the homeowner in advance? (Top)

The first step in most appraisals is the property inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its features. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

Written property agreements, such as a maintenance agreement for a shared driveway.
Title policy that describes encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Most recent real estate tax bill and or legal description of the property.

Define "Market Value" (Top)

In real estate appraising, Market Value is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Once complete, who actually owns the appraisal report? (Top)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Top)

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.