Superior Research Group has answers to "Frequently Asked Questions"

Superior Research Group is willing to handle any concerns you might have about appraisals or real estate in West Orange and Essex County. Contact Superior Research Group today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would request services from Superior Research Group?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have certainty that the value conclusion is accurate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Essex County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (See list of FAQ's)

An appraisal report is an investigation leading to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or valuation. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves discerning what the improvements would cost minus physical deterioration, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns making a comparison to comparable homes nearby. Being the most popular approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to determine the value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does   (See list of FAQ's)

An appraiser forumlates a fair and credible opinion of market value, often in the context of a real estate purchase. Appraisers show their expert investigation in appraisal reports.


What are the reasons I would request services from Superior Research Group?   (See list of FAQ's)

There are many reasons to get an appraisal from Superior Research Group with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To challenge high property taxes.
  • If you need to take care of an estate.
  • To provide you a leg-up when purchasing a home.
  • To find a reasonable property value when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
For a more extensive explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (See list of FAQ's)

Appraisers do not do provide residential property inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the house, from the top to the bottom. The standard property inspector's report will contain an evaluation of the condition of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)?   (See list of FAQ's)

Frankly, it's night and day. What the CMA depends on are vague trends. An appraisal utilizes comparable sales that can be validated by records. In addition, the appraisal looks at other factors like condition, location and construction prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. 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 previously agreed upon sum for work they perform, regardless of their outcome.

What are the contents of an appraisal report?   (See list of FAQ's)

The main objective of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The reason for the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.
  • Relevant property attributes, including: location, physical attributes, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was involved in the activity of completing the appraisal.
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, how can I have certainty that the value conclusion is accurate?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained an appropriate analysis of the data.

  • That significant errors of omission or commission were not committed individually or collectively.

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

  • That a solid, defensible appraisal report was communicated.
To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged. In addition, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (See list of FAQ's) Licensing and certification takes coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (See list of FAQ's)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Essex County or other areas?   (See list of FAQ's)

Gathering data is one of the primary tasks an appraiser does. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is collected from a variety of sources. To research recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.


What can a full appraisal do for me?   (See list of FAQ's)

If you're making some sort of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Superior Research Group is the best way to ensure assets are divided evenly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender if a borrower is unable to pay on the loan and the value of the property is less than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Does your monthly loan payment have a lineitem for PMI?Call Superior Research Group today at 973 324-0059 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal appointment   (See list of FAQ's)

We begin with an inspection of the home. 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 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. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
  • 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".
  • Most recent real estate tax bill and or legal description of the property.

What is "Market Value?"   (See list of FAQ's)

In real estate appraising, Market Value (as opposed to Fair 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."



Who has rights to the appraisal report?   (See list of FAQ's)

For mortgage transactions, the lender requests 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 entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (See list of FAQ's)

It really depends on the market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 were second, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.