Anderson & Associates has answers to "Frequently Asked Questions"


	Anderson & Associates is always prepared to address any inquiries you might have about appraisals in Ridgefield and Clark County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person request your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the report, what guarantee is there that the final number is legitimate?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does Anderson & Associates get the data 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?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Top)

The method of writing an appraisal report deals with an evaluation which leads to an opinion of value. This opinion or estimate is figured by a formal method that typically uses three "common approaches to value". One of the processes is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which concerns making a comparison to similar homes nearby. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.

What does an appraiser do? (Top)

An appraiser provides a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers illustate their professional conclusions in appraisal reports.

Why would a person request your services? (Top)

There are a lot of reasons to purchase an appraisal from Anderson & Associates with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:

To get a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To challenge improperly assessed property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To figure out an honest sales price when listing your home.
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.
It's possible you could have to deal with being 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? (Top)

The appraiser is not a home inspector nor does he/she do a full home inspection. The purpose of a home inspection is to evaluate the structure of the house from foundation to top. Usually, a home inspection report will explain the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Top)

To be honest, they share nothing in common. What the CMA relies upon are ill-defined trends. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain area and building prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person creating the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created 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 whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for assignments, regardless of their outcome.

What does the appraisal report contain? (Top)

The main point of an appraisal report 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:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was included in the activity of completing the appraisal.

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

After completing the report, what guarantee is there that the final number is legitimate? (Top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an apropos analysis of the data.

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

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

That a believable, supportable appraisal report was communicated.

To become a state licensed appraiser, there are intense education requirements as well as real world experience that must be attained. Plus, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Top)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Anderson & Associates get the data used to estimate values in Clark County or other areas? (Top)

One of the main things an appraiser does is to compile property data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To double-check actual sales prices, we research tax records and other public documents. Appraisers often need 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 service.

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

What can a full appraisal do for me? (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine 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. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.

What exactly is PMI and how can I get rid of it? (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy guards the lender in case a borrower doesn't pay on the loan and the value of the house is lower than the balance of 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.


	Does your monthly loan payment include a fee for PMI?Call Anderson & Associates today at 360-909-9139 or send us an e-mail. Documentation of your home's current value could save you thousands.

Does the appraiser need anything from me in advance? (Top)

The first step in most appraisals is the home inspection. During this process, we 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 (gates aren't locked, etc). Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Written property agreements, such as a maintenance easement for a shared driveway.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Brag sheet that lists major home improvements and enhancements, 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).
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (Top)

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 actually owns the appraisal report? (Top)

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 appraisal - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; 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.

I want to get more for my house. Where should I spend money renovating? (Top)

Like all things real estate, this is dependent on a home's location. 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. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.