Rich Plagenz has answers to "Frequently Asked Questions"

Rich Plagenz is always happy to elaborate on any inquiries you might have about appraisals or real estate in Columbus and Franklin County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, how can I have assurance that the value indicated is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Rich Plagenz get the data used to estimate values in Franklin County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (Back to top)

An appraiser provides an evaluation that produces an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or valuation. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for comparable houses in the vicinity and discovering the value based on making a comparison of those homes to the property being investigated. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Back to top)

An appraiser provides an unbiased and well justified determination of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.


What would cause me to require a real estate appraisal?   (Back to top)

There are many reasons to order an appraisal from Rich Plagenz with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To fight high property taxes.
  • To deal with an estate.
  • To give you a leg-up when purchasing real estate.
  • To determine an honest sales price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (Back to top)

Appraisers do not do complete home inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the home from foundation to attic. The archetypal home inspector's report will contain an evaluation of the integrity of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Simply put, it's like comparing sugar and saccharin. What the CMA relies upon are vague trends. An appraisal is based on comparable sales that can be proven by records. Location and building values are also a priority in an appraisal. 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.

The person creating the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Ohio licensed professional who bases their livelihood on valuing properties in and around Franklin County is behind the appraisal. Further, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report?   (Back to top)

The main objective of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, 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 job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the value indicated is accurate?   (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • That the information analysis utilized in the appraisal was appropriate.

  • Whether individually or collectively, there were no critical errors contained in the report, nor any relevant details left out.

  • That appraisal services were done in a careful and conscientious fashion.

  • That a solid, supportable appraisal report was communicated.
To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained. Likewise, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification requires classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she must then engage in continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Typically, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Rich Plagenz get the data used to estimate values in Franklin County or other areas?   (Back to top)

Collecting information is one of the primary tasks an appraiser does. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Appraisers often 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 most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me?   (Back to top)

An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. When selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Rich Plagenz is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

What exactly is PMI and how can I get rid of it?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. It covers the lender in case a borrower defaults on the loan and the value of the home is lower 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.

Is PMI something increasing your monthly house payment?Call Rich Plagenz today at 6144865322 or send us an e-mail. A new appraisal could save you thousands.

How do I get ready for the appraiser?   (Back to top)

The first step in most appraisals is the home 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 amenities. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A survey or plot map of the property and building (if available).
  • Title policy that lists encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"?   (Back to 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."

Does the appraisal belong to the bank or the consumer?   (Back to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Back to top)

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the best ROI 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.