Willamette Valley Appraisal Professionals has answers to "Frequently Asked Questions"


	Willamette Valley Appraisal Professionals is prepared to talk to you about any inquiries you might have about appraisals or real estate in Milwaukie and Clackamas County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to request services from Willamette Valley Appraisal Professionals?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the appraisal has been completed, what guarantee is there that the final number is legitimate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Willamette Valley Appraisal Professionals get the data used to estimate values in Clackamas County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (Go to list of questions)

An appraiser performs an evaluation that generates an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or estimate. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the property, less the age and physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable properties nearby and discovering the value based on making a comparison of those homes to the home being appraised. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise 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 money produced by the property.

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

An appraiser provides an unbiased and well justified assessment of market value, to be used in making real estate transactions. Appraisers demonstrate their expert investigation in appraisal reports.

What would cause me to request services from Willamette Valley Appraisal Professionals? (Go to list of questions)

There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:

If you are applying for a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove insurance.
To contest improperly assessed property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing a home.
To determine a likely property value when putting your home on the market.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
If you are ever involved in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

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

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and appliances of a home, from the roof to the foundation. 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? (Go to list of questions)

Frankly, they have nothing in common. The CMA uses market trends to create most of their business. The appraisal relies on specific proven comparable sales. In addition, the appraisal looks at other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent voice, with no conditional interest in the property's value, 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 point 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 purpose of the assignment.
The type of value contained and a definition of the value reported.
The effective date of the value opinion.
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, 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 used while working up the job.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, what guarantee is there that the final number is legitimate? (Go to list of questions)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was proper.

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

That appraisal services were not rendered in a careless or negligent fashion.

That a trustworthy, substantiated appraisal report was imparted.

To become a state licensed appraiser, there are strenuous education requirements as well as practical experience that must be logged. In addition, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Go to list of questions)

Commonly, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Willamette Valley Appraisal Professionals get the data used to estimate values in Clackamas County or other areas? (Go to list of questions)

Compiling data is one of the main things an appraiser performs. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

What can a full appraisal do for me? (Go to list of questions)

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 the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Willamette Valley Appraisal Professionals is the best documentation to ensure assets are divided evenly. Simply put, a house 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? (Go to list of questions)

PMI stands for Private Mortgage Insurance. This supplemental policy covers the lender in case a borrower defaults on the loan and the market price of the property is less than what is owed on the loan. 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.


	Did you have less than 20% to put down on your mortgage? Call Willamette Valley Appraisal Professionals today at 503-786-9944 to see if you can get rid of your Private Mortgage Insurance premium.

Does the appraiser need anything from me in advance? (Go to list of questions)

We begin with an inspection of the property. 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Any paperwork, 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, your septic system and wells.
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 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? (Go to list of questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (Go to list of questions)

The added value of a particular amenity truly depends on the local market. For example, installing 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.