D. O'Kane and Company, LLC has answers to "Frequently Asked Questions"

D. O'Kane and Company, LLC is willing to talk to you about any questions you might have about appraisals or real estate in Maricopa County. Contact us today to talk about how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons I would request services from D. O'Kane and Company, LLC?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Upon completion of the report, how can I have confidence that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who do appraisers work for?
Where does D. O'Kane and Company, LLC get the information used to estimate values in Maricopa 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?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (Top)

An appraisal report is a thought process allowing the appraiser to come to an opinion of value. This opinion or estimate is figured by a formal method that typically uses three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves concluding what the improvements would cost less physical depreciation, plus the land value. The Sales Comparison Approach deals with searching for comparable houses in close proximity and discerning value based on making a comparison of those prior sales to the house being investigated. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a residence. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.

What does an appraiser do?   (Top)

An appraiser forumlates a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers exhibit their expert investigation in appraisal reports.


What are the reasons I would request services from D. O'Kane and Company, LLC?   (Top)

There are many reasons to get an appraisal from D. O'Kane and Company, LLC with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • To receive a loan.
  • If you would like to lower your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To give you a leg-up when purchasing real estate.
  • To find a likely price when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • If you are ever involved in a lawsuit.
If you need more information about the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Top)

Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the house from basement to attic. The standard property 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.

My agent performed a CMA for me. Is that the same as an appraisal?   (Top)

Simply, they share nothing in common. The CMA utilizes market trends to generate most of their business. The appraisal is based on similar verifiable comparable sales. Also, the appraisal looks at other factors like condition, location and construction prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who bases their livelihood on valuing properties in and around Maricopa County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their outcome.

What does the appraisal report contain?   (Top)

Every report must indicate a supported value opinion and should document the following:
  • The client and other intended users.
  • The intended use of the report.
  • The purpose of the appraisal.
  • The type of value reported and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
  • All 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.
  • What was included in the activity of completing the assignment.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have confidence that the value indicated is legitimate?   (Top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal used an appropriate analysis of the information.

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

  • That appraisal services were provided in a careful and judicious fashion.

  • That a trustworthy, defensible appraisal report was imparted.
To become a state licensed appraiser, we must fulfill extensive education and experience requirements that train us to produce an unbiased opinion. Plus, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once licensed, he/she must then complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (Top)

Typically, appraisers are hired by 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 D. O'Kane and Company, LLC get the information used to estimate values in Maricopa County or other areas?   (Top)

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

General data is received from a many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To double-check actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers routinely need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why do I need a professional appraisal?   (Top)

An appraisal is a valuable tool whenever the value of your home is relevant 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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from D. O'Kane and Company, LLC is the best way to ensure assets are split up properly. Simply put, a house 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?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional plan guards the lender in case a borrower doesn't pay on the loan and the value of the home is less than the loan balance. 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 mortgage payment include a fee for PMI?Call D. O'Kane and Company, LLC today at 602.505.9327 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser?   (Top)

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 condition of its features. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

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).
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • 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"?   (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."

Who has rights to 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 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.

It's different when it's the homeowner engaging 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 stipulated 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 best ROI from renovating a home comes in the kitchen. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms were second, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.