Q & A with Dottie Herman

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Q1 - What is a summary or restricted use appraisals? They are supposedly cheaper than regular appraisals and can be used as a guide for sellers when pricing their homes. Is this true?

A - The answer, in short, is "not really.". To clarify the point, there are generally 3 types of report formats used by appraisers: self-contained, summary, and restricted use.

• Self-contained appraisals are usually presented in a narrative format and include all the raw information that is viewed during the preparation and research for the assignment. The report can be the size of a phone book and is rarely ever used.

• Summary appraisals are what most consumers are familiar with. They tend to be presented on a form and contain the information you generally need to understand how the appraiser came to their value conclusion. Most single-family bank appraisals are summary reports. Incidentally, the appraisal process is the same as with the self-contained report, but without the volumes of data and materials attached to the report.

• Restricted use appraisals contain the least amount of material of the 3 report options, but use the same research and process that the other 2 versions require. The name refers to limiting the readership of the report to one party already familiar with the appraisal so that clerical shortcuts would not theoretically be confusing to the reader. This format is more commonly used with financial institutions who may be updating a mortgage portfolio and want a simpler presentation when updating hundreds of appraisals already completed for the file - the same analysis is done as that in a "summary," but it is not formally presented to the client. Usually when a consumer sees "restricted use" label on the cover of an appraisal, it's because the appraiser mistakenly thinks it limits their liability for the results of the report, but it does not.

So the time it takes to perform any one of these 3 single-family home appraisals is fairly consistent across the board; the primary cost difference among them is instead due to the amount of time spent on the clerical presentations themselves.

With computers and appraisal software packages, the clerical aspect of an appraisal assignment has become a nominal cost. As with most things today, you can probably find someone who can perform one at a bit of a cheaper rate; however, it's vital that you check their credentials to ensure that they have the necessary local market knowledge to provide you with a reliable appraisal that you can confidently reference and base your informed decision on. Saving $50 on an appraisal report may cost you a lot more in the long run.

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Q2 - Are banks giving cash-out refinances at the moment? I called a few and I wasn't able to secure one.

A - The short answer is yes.  Some Banks are giving out refinances but there are a number of reasons why it may be difficult to secure:  If your home lost value, if you took an exotic mortgage before that you may not have been able to qualify for if everything was documented, or your credit score is currently too low.  Those are a few reasons.  It really depends on how far you got into the process before the lender indicated they could not be of assistance.  The government has put into place a number of programs to help people refinance, but there are still going to be circumstances where the loan is outside of the government servicing entities (Fannie Mae and Freddie Mac).

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Q3 - I want to put my home on the market, but I am unsure what to list my home at. There are a few other homes in my area for sale, but they vary in price greatly. How do I decide where my home should be listed?

A - Hiring an experienced real estate professional who has expertise in your neighborhood will help you to price your home correctly. Not all homes are comparable and active brokers should have a first-hand knowledge of the condition and features of the current listings; in addition to helping you prep your property to come to market.  Alternatively, you can view comparable properties on line and/or visit them to see how they measure up to yours.

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Q4 - I live in an area impacted by Hurricane Sandy. My home was on the market before Sandy, however, I didn't have any water damage and was very lucky. Do I relist my home at the same price; decrease it because of the area in which I live? I just want to sell as we are moving down South.

A - Many of the areas impacted by Hurricane Sandy have suffered from the psychological effects of living near water. It is best to consult with a real estate professional in your area and benefit from their expertise. If your house did not sell prior to the storm, a price reduction at this time will likely attract buyers.

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If you have a real estate question for Dottie, please send it to; Reporters@WPCnews.com