Adam A. Gromko has answers to "Frequently Asked Questions"

Adam A. Gromko is willing to address any questions you might have about appraisals in Murrieta and Riverside County. Contact Adam A. Gromko today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would I need your services?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
After completing the report, how can I have confidence that the value conclusion is legitimate?
How difficult is it to become certified?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Riverside County or other areas?
How can a licensed appraiser help me?
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?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Go to list of  questions)

An appraisal report is a thought process allowing the appraiser to come to an opinion of value. The real estate appraiser must use a several "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the property, less the age and physical dilapidation, adding the land value. The Sales Comparison Approach involves finding comparable houses in close proximity and discovering the value based on comparing those houses to the property in question. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do?   (Go to list of  questions)

An appraiser generates a professional, unbiased opinion of market value, in the support of real property exchanges. Appraisers exhibit their expert analysis in appraisal reports.


Why would I need your services?   (Go to list of  questions)

There are a lot of reasons to order an appraisal from Adam A. Gromko with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To challenge inflated property taxes.
  • To settle an estate.
  • To provide you a negotiating tool when purchasing a home.
  • To figure out a likely property value when listing your home.
  • To protect 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 ever find yourself in a lawsuit.
For a more extensive description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Go to list of  questions)

Home inspectors do not produce an opinion of value and do not do appraisal reports. An inspection is a third-party evaluation of the accessible structure and electrical and mechanical systems of a house, from the roof to the foundation. The usual home inspector's report will include 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Go to list of  questions)

Simply put, it's like comparing sugar and saccharin. The CMA uses market trends to create most of their business. Appraisals use comparable sales which are verifiable resources. Area and construction costs are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

What's in an appraisal report?   (Go to list of  questions)

The main purpose of an appraisal document 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 appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, 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.
  • The scope of work considered to complete the assignment.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have confidence that the value conclusion is legitimate?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis utilized in the appraisal was proper.

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

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

  • The final appraisal report was understandable, sound and defensible.
To become a state licensed appraiser, there are intense education requirements as well as real world experience that must be logged. Likewise, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once an appraiser is licensed, he/she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (Go to list of  questions)

Most of the time, appraisers are employed by lenders to render a value opinion on property 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 Riverside County or other areas?   (Go to list of  questions)

Collecting information is one of the main tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is gathered 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 numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

How can a licensed appraiser help me?   (Go to list of  questions)

An appraisal is a worthwhile anytime your home's value is relevant to a financial decision. When selling your house, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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?   (Go to list of  questions)

PMI is short for for Private Mortgage Insurance. This additional policy takes care of the lender if a borrower doesn't pay on the loan and the market price of the house is less than the loan balance. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly mortgage payment include a fee for PMI?Call Adam A. Gromko today at (626) 354-4599 or send us an e-mail. A current appraisal could save you thousands.

Do you need anything from the homeowner in advance?   (Go to list of  questions)

The first step in most appraisals is the home inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What does "Market Value" mean?   (Go to list of  questions)

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."

Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

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 report - 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 hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may state 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.

Which home renovations add the most to the price?   (Go to list of  questions)

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.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, yielding 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 atypical for your neighborhood in terms of size.