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Understanding Real Estate Jargon: An Interview with Gerard Pomert of Gerard Pomert Valuation Services

By Gerard Pomert

Tell Us About Gerard Pomert Valuation Services:

Gerard Pomert Valuation Services was founded approximately 11 years ago as a result of real estate investing activity starting in 2003. I developed a fascination with the business of real estate because it involved the totality of the economy, financial markets, demographics, changing technologies and social trends. I always had an interest in politics and economics and this utilized all of that and more. Whenever I would go to a dinner party, or anywhere for that matter, I realized that is what people talk about: real estate, the economy, politics, what their neighbor's house sold for; it's universal.

The Mission of Gerard Pomert Valuation Services is to provide accurate, well organized reporting in a timely manner with quality supporting data for both residential and commercial customers.

What is a Real Estate Appraiser's Purpose?

This is a good question. Defining the purpose of an appraisal is always the first step, it can be performed for a home loan, an estate, a divorce, a tax appeal, income analysis, re-financing, etc. Once the purpose is established, I gather some general data, and I then make arrangements to visit and inspect the property, though I am not a home inspector. An appraiser performs a non-invasive visual inventory that is not intended to reveal defects or detrimental conditions, which are not readily apparent. Once there, I take photos, review and document certain characteristics of the property, I familiarize myself with the surrounding market area, and then we return to the office where we start the research. This is where the real work starts. Many people do not know how much actual work goes into an appraisal. We refine our data, sometimes talking to building officials, zoning officials, other Realtors, other market participants. We often visit various town halls for any relevant documents (deeds, copies of septic plans, plat maps, etc). Flood zone determinations can be provided by the Federal Emergency Management Agency or other data sources, then included in the appraisal report, however, an appraiser is also not a surveyor, and further evaluation could be recommended. We then assemble this data into a coherent, organized report which contains comparable properties to the subject property to determine an estimate of market value.

Real Estate Appraiser Jargon:

  • Comparable Sales: Those sales which are the most similar sold properties within a well-defined neighborhood. We then equalize with the subject property differences. For example, if the subject is in Cape Cod, we hope to find other Cape Cod properties.
  • Adjustments: Dollar adjustments are made to equalize the comparable sales to the subject property. For example, the subject property might have a two car garage, while a recent comparable may have a single car garage. The appraiser then determines what the additional bay is worth and makes a dollar adjustment to that comparable.
  • Physical Depreciation: The rate that the improvements (e.g. the 'bricks and mortar' of your home) degrade physically over time. This 'rate' shows up as condition adjustment and also in the cost approach when determining the effective age, which is not the same as the actual age. For example, a home may be 90 years old, but since it has a new roof, windows, furnace and fresh paint, the effective age is perhaps only 30 years old.
  • 'As Is': Most appraisals call for an 'as is' value. That means, the value is determined by the condition of the property on the day the appraiser does the inspection. For example, if someone says they are putting on a new deck, or they have hardwoods waiting to be installed, it simply does not matter to the lender if this is not in place at the time of the inspection. Of course, an appraiser can be called upon to come back once the other improvements have been made, but much of this business is time sensitive, and it is up to the lender, not necessarily the homeowner.
  • Gross Building Area: The total area of a home measured from ground level up. For example, the lower level of a Raised Ranch is not always considered living area by lenders, the living area must be above grade.

Have You Ever Experiences a Miscommunication Due to Lack of Understanding?

I make it my business to be available to underwriters, (lending institutions generally pass along the appraisal to an underwriter for review prior to making the loan commitment). I am also available when hired privately by my clients to discuss and review. I think my first opportunity to explain what occurs in an appraisal is at our first contact, so generally there is very little misunderstanding and never a lack of communication.

Any Advice About Home Appraisal Jargon?

My advice is to review your appraisal carefully, if you have any questions, make sure you get clarification. If an appraisal comes in lower than expected, for example, on a home purchase, there are times when a second appraisal may be ordered to refute that.

Other times, the sales price might be re-negotiated. Be savvy about the area you live in or are looking to purchase in, rely on your professionals, (e.g. your Realtor, Appraiser, Lender, and Attorney).

It's a process, and it doesn't have to be complicated, you just have to work with people you can trust. Appraisers are held to a code of ethics, we have enormous amounts of training and continuing education requirements.

What Services Does Gerard Pomert Valuation Services Provide?

We value real estate. We act as a neutral valuation facilitator for Realtors, Attorneys, Private Parties, and Lenders. When someone needs an Appraiser, often their Realtor is whom they contact as their first resource. We receive inquiries, we visit the home, we photograph the property and area, we gather data. We aid Realtors who sometimes need a third party perspective when conducting CMA (Comparative Market Analysis). It adds credibility to a Realtor's listing presentation, and if necessary, can sometimes ease the pain of price reductions. Maintaining relationships with zoning officials, market experts, Attorneys, and Realtors is key. A good portion of our business are appraisals for home sales, reverse mortgage appraisals, estate/divorce valuations, tax appeals, and re-finances. We also do a great deal of 'good will' consultations, for those in need of some direction and information. My company often finds itself doing 'reviews' of other appraisals when the lenders find it necessary. In the case of home sales, lenders are usually sourcing the jobs. Realtors very rarely see the appraisal, they only know when something is wrong, that is, the value doesn't come up to the purchase price of the agreement. This can lead to closing delays or even the loss of a sale. Full explanations and complete accuracy is key, geographic competence is central. There can be no second guessing, both Buyers and Sellers have much at stake!

Contact Information:

Gerard Pomert Valuation Services can be reached by cell 24 hours a day at 401-855-9900, by email at: gpomert@yahoo.com, through my website at: www.gerardappraisal.com. Our offices are located at 31 Farewell Street, Suite 1, Newport,RI 02840. I will often work with Realtors on a 'goodwill' basis, taking phone calls with inquiries about the market, or even a specific property? many weekends you can find me at open houses discussing the market with individual Realtors.

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