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Frequently Asked Questions About Home Appraisals: An Interview with Ellen Moorhouse of Moorhouse Appraisal Service, LLC

By Ellen Moorhouse

Tell us a little bit about your company and its foundation.

Moorhouse Appraisal Service, LLC began when the founder, Dean Moorhouse, was in the process of shifting professional careers within the real estate market. Having previously worked in market valuation for many years with a company called Market Intelligence, and then later Patriot Properties, he became a licensed Residential Appraiser in the late 1990's. In 2009 he became a Certified Residential Appraiser.

In 2011, his daughter, Ellen Moorhouse, received her trainee's license. After graduating from UMASS Amherst, she began to work for Moorhouse Appraisals as office manager and appraisal trainee. 2500 experience hours and a lengthy state licensure exam are required (in no less than 24 months) to obtain her Certified Residential Appraiser License, which she hopes to do within the next two months. She has also recently obtained her Real Estate Salesperson License, and is currently working with Nick Gelfand, and NRG Real Estate in Longmeadow, MA. Nick Gelfand is the third and final licensed appraiser in the Moorhouse Appraisals office. While we don't appraise purchases for the sake of remaining unbiased at all times, the local knowledge of the real estate markets that we gain as appraisers goes hand in hand helping to navigate the same market for our clients as real estate agents.

There are three tiers of residential appraising once you obtain your trainee license:
Residential Appraiser: Can appraiser only single family homes (up to a four-family), under a million dollars (no high-value, no commercial, non-complex).
Certified Residential Appraiser: Can appraiser any time of residential properties (single families, multi-families, apartment complex and condominium units).
General Residential Appraiser: Can do everything prior, including all commercial work. This is the only tier that can do commercial appraising.

You need to acquire a residential appraiser trainee license before you are able to become an appraiser, and the process to become a real estate appraiser is not painless. Like any other state licensure process, there are classes and benchmarks that are required for licensure, and the process can become quite expensive. As of January 1st 2015, it will also require a Bachelors degree.

Appraisals compare like features of property dwellings. For instance, if an appraiser appraises a one-story ranch style dwelling with three bedrooms, he will look within the subject's local market to see if any comparable three-bedroom ranch style dwellings have sold recently. He will then make a comparison process based on similar amenities, features, size, and many other factors pertaining to the property. The final report will eventually include market valuation data, comparable sales, photographs, local maps and data, as well as town records and potentially any associated deeds, zoning data, and other property information.

As the real estate market recovers from the 2008 industry crash, banks implemented strict regulations into the market. This allowed the created of third parties, called AMC's (Appraisal Management Companies) to flourish. When an individual goes to the bank for a loan, be it for real estate, or probate, or an estate, or divorce, the bank orders an appraisal as part of the process of market valuation, to see how much their asset is worth. These AMC companies target banks as the clients, placing appraiser's on a rotating roster for appraisal orders. Often times fees associated with these AMC's can be as high as 40%. And I quote: " The term Dodd-Frank refers to a comprehensive and complicated piece of financial regulation born out of the Great Recession of 2008." via: www.cnbc.com/id/47075854

What are some common questions people ask you about home appraisals and their answers (list)?

What improvement will bring the most bang-for-your-buck?
Many folks think that by buying a $25,000 in-ground pool that it will instantly make their house worth $25,000 more. However, many times, improvements or upgrades to a dwelling do not bring a dollar-for-dollar return on value. Most ROI (return on investment) can be seen in the functional utility of the home- the kitchens, the bathrooms, utilities, etc. Also cosmetic work can go a long way in trying to sell a property. Never underestimate elbow grease in the form of fresh paint, floors, or a relatively painless kitchen counter-top-or-tile upgrade.

WHAT ABOUT MY DIRTY LAUNDRY ALL OVER THE FLOOR?!
Personal property has no bearing on an appraisal. Your work clothes on the floor will not alter the number of bedrooms and bathrooms the property has, for instance.

Is an appraisal the same as an assessment?
No. An assessment is what the town says your property is worth, and you pay taxes on that number. An appraisal is a current picture of time of what your property is worth on the open market at any given time. Many times public records can be outdated, so it would be in any individuals interest to call the town assessor to have see if an accurate updated assessment is on file for your tax payments.

How are home appraisers paid? (e.g. standard/fixed fee, transportation costs, etc.)

Generally appraisers are paid a standard rate. However, there are some exceptions to this rule, depending on the property. For instance, million dollar properties are often quite large, and have unique upgrades and renovations, and would cause the appraiser to quote a higher fee for these complexities. Other complexities, such as rural location, or unique large acreage, could also cause the appraiser to raise his fee. Commercial appraisals can especially be costly, but well worth it for a potential investor to have in his back pocket as current market knowledge. An appraisal report is paid a flat fee for, regardless of how long it takes to complete it. However, an appraiser quotes his fee after verifying some features about the property.

How long does an appraisal take?

A home appraisal is unique depending on every property, and times vary based on the property itself. For instance, single-family homes take less time to appraise than multi-family properties, as multi-family properties tend to be larger, and the appraiser often has to coordinate tenant schedules to gain access to the property for the inspection. The physical inspection itself can take about an hour, the report writing can take anywhere from 1-5 hours, depending on the complexity of the subject. Some appraisals are just so unique you have to leave it and go back to the data, attempting to compare for an accurate market value.

The appraisal inspection itself will take anywhere from a half-hour to an hour, depending on the relative complexity of the house. Any typical single family dwelling needs to be completely measured around the exterior perimeter, and photographs are taken of each individual room. The bank does not allow pictures to be taken with people in them, and bank regulations suggest also trying to not take photographs with peoples pictures or faces. These pictures are for purposes of documentation only. The appraiser attempts to verify the current condition of ceiling, the flooring, the walls, etc.

What advice do you have for someone receiving a home appraisal?

Seek someone local with experience in your local market. Oftentimes AMC's can be located out of state, and the next appraiser on their roster may not be exactly familiar with your market area. Do a little bit of research into local appraisers, possibly speak to a few about your needs, and why you are seeking a current appraisal (divorce, estate, home equity, selling, just curious, etc). Many local appraisers are happy to do business with not only banks, but for every purpose, including private clients (local individuals). It is always in your best interest to know what your property is worth not only for your own peace of mind, but that so your town assessment (and the taxes you are paying) can accurately reflect a market picture of what you owe, and you are not surprised when it comes time to sell, move, or refinance. Be your own best advocate in any real estate transaction you undertake.

What is the best way for people to reach you and or your company?

We strive to always be available for our clients, and are flexible with scheduling and other appointment needs. We can be reached in person at our office at 813 Williams St Suite 211 Longmeadow, MA 01106, or digitally on our website at www.moorhouseappraisals.com.

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