Allen Appraisal & Consulting, Inc. has answers to "Frequently Asked Questions"


	Allen Appraisal & Consulting, Inc. is willing to elaborate on any concerns you might have about appraisals in Clark County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to require a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the report has been delivered, what assurance is there that the final number is legitimate?
How are appraisers certified?
Who employs appraisers?
Where does Allen Appraisal & Consulting, Inc. get the information used to estimate values in Clark County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

What is an appraisal? (See list of FAQ's)

An appraiser provides an evaluation that leads to an opinion of value. The appraiser must use a few "approaches," typically three, to conclude the estimation of market value. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the age and physical dilapidation, adding the land value. Another of the approaches is the Sales Comparison Approach - which deals with making a comparable analysis to other similar nearby properties which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.

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

An appraiser forumlates a professional, unbiased determination of market value, in the support of real estate transactions. Appraisers present their expert investigation in appraisal reports.

What would cause me to require a real estate appraisal? (See list of FAQ's)

There are many reasons to obtain an appraisal from Allen Appraisal & Consulting, Inc. with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:

If you are applying for a loan.
To reduce your property taxes.
To build a case for a homeowner's equity and remove insurance.
To fight inflated property taxes.
To handle an estate.
To offer you an edge when purchasing a home.
To determine the most probable sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

Is an appraisal the same as a home inspection? (See list of FAQ's)

Appraisers do not do complete residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the home from basement to top. The usual home inspector's report will include an evaluation of the integrity 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)

Honestly, they share nothing in common. The CMA depends on vague local market trends. Appraisals use comparable sales which are valid resources. Area and architectural values are also precedent in an appraisal. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is hands down the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases their livelihood on valuing properties in and around Clark County is behind the appraisal. Moreover, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the price of the home.

What can I expect to see in my appraisal report? (See list of FAQ's)

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, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
Any 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 to complete the job.

For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what assurance is there that the final number is legitimate? (See list of FAQ's)

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

That the information analysis contained in the appraisal was appropriate.

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

That appraisal services were provided in a careful and cognizant fashion.

The final appraisal report was understandable, credible and conclusive.

There are intense classroom and experience requirements that must be satisfied in order to get an appraisal license in Washington. Likewise, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting 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 or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (See list of FAQ's)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Allen Appraisal & Consulting, Inc. get the information used to estimate values in Clark County or other areas? (See list of FAQ's)

Gathering information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is received from a many sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other properties in the same market.

What can a full appraisal do for me? (See list of FAQ's)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by commissioning 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.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy guards the lender if a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Allen Appraisal & Consulting, Inc. when it comes to analyzing real estate appreciation in Vancouver and Clark County. Contact us today.

How do I get ready for the appraiser? (See list of FAQ's)

The first step in most appraisals is the property 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. Is there anything you can do to help? Yes there is! First, be sure we have 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 items like furnaces and water heaters.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if available).
Information on any written private agreements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

Define "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."

Does the appraisal belong to the bank or the consumer? (See list of FAQ's)

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 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 situations, the appraiser may stipulate the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements? (See list of FAQ's)

The answer to this is different depending upon the location of the home. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 increase your value would be painting just for the sake of redecorating.