Appraisal Associates, LLC has answers to "Frequently Asked Questions"


	Appraisal Associates, LLC is always prepared to talk to you about any concerns you might have about appraisals in Vancouver and Clark County. Contact Appraisal Associates, LLC today to learn how we can help solve your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
Why would I need your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the assignment has been completed, how can I have assurance that the value conclusion is accurate?
What does it mean for an appraiser to be licensed?
Who hires Appraisal Associates, LLC
Where does an appraiser get the information used to estimate values in Clark 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?
Do you need anything from me in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (See list of FAQ's)

An appraiser performs an evaluation that produces an opinion of value. There are three "common approaches to value" which helps the real estate appraiser come to this opinion or estimate. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the property, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for similar houses in close proximity and discovering the value based on comparing those houses to the house in question. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

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

An appraiser forumlates a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers illustate their professional analysis in appraisal reports.

Why would I need your services? (See list of FAQ's)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

To get a loan.
To reduce your property taxes.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight high property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing real estate.
To determine a reasonable sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
If you are ever involved in a lawsuit.

If you need more information regarding the appraisal process, please click here.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the available structure and electrical and mechanical systems of a house, from the top to the foundation. The archetypal home inspector's report will include an evaluation of the condition of the house's heating systems, 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)

To be honest, they share nothing in common. The CMA relies on indistinct market trends. An appraisal is based on comparable sales that can be verified by records. Also, the appraisal looks at other factors like condition, area and replacement costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person behind the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their outcome.

What does the appraisal report contain? (See list of FAQ's)

Every appraisal must demonstrate a believable estimate of value and must clearly state the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
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.
The scope of work considered when completing the appraisal.

For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been completed, how can I have assurance 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 used analysis of the information.

Whether individually or collectively, there were no grave errors contained in the appraisal, nor any relevant details left out.

That appraisal services were not carried out in a careless or negligent manner.

That a trustworthy, supportable appraisal report was conferred.

To become a state licensed appraiser, we must fulfill considerable education and experience requirements that give us the background to formulate an unbiased opinion. In addition, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's)

Licensing and certification is achieved through classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Appraisal Associates, LLC (See list of FAQ's)

Typically, appraisers are called upon by mortgage lenders to render a value opinion on a home involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Gathering data is one of the primary occupations of an appraiser. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is collected from a number of places. To look up recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. 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. Don't make decisions in the dark with a professional appraisal.

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

PMI stands for Private Mortgage Insurance. This supplementary plan takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your home value appreciated since you first purchased? Contact Appraisal Associates, LLC today at 360-896-2622. You may be able to cancel your Private Mortgage Insurance payment.

Do you need anything from me in advance? (See list of FAQ's)

The first step in most appraisals is the home inspection. 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 the appraiser has easy access to the exterior of the house . Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if available).
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A bill for your most recent real estate taxes which should also contain a 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. 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 appraisal - it's usually bundled 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 scenarios, 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.

Are some home improvements more worthwhile than others? (See list of FAQ's)

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the best ROI 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 are right up there with kitchens, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.