Frequently Asked Questions


  • The procedure of writing an appraisal report deals with an investigation which leads to an opinion of value. This opinion or estimate is arrived at using a formal method that generally uses three "common approaches to value". One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, less the age and physical depreciation, adding the land value. Another of the processes is the Sales Comparison Approach - which deals with making a comparable analysis to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of value of a house. The Income Approach is generally used for determining the cost of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

  • An appraiser produces a professional, unbiased opinion of value (usually market value), for a wide variety of intended uses. Generally, the conclusions are relayed via a written report.

  • There are a lot of reasons to get an appraisal. Beyond a typical mortgage finance intended use, others include:

    • To reduce your tax burden.
    • To get rid of Primary Mortgage Insurance.
    • To settle an estate.
    • To offer you a leg-up when purchasing real estate.
    • To determine an honest property value when selling real estate.
    • To protect your rights in a condemnation case.
    • Because an official agency such as the IRS requires it.
    • If you are ever involved in a civil case.
  • Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and electrical and mechanical systems of a house, from the roof to the foundation. The usual house inspector's report will contain an evaluation of the integrity of the home's heating system, 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.

  • To be blunt, the difference is similar to night and day. Most CMA's are created using a very "broad brush" with respect the a specific property in its market. An appraisal is MUCH more in depth and created under a much higher set of standards than that of which a real estate agent is bound by.

    Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the outcome of their potential services on the property (they are not unbiased).

  • Each report must reflect a credible estimate of value and must identify the following:

    • The client and other intended users.
    • The intended use of the report.
    • The purpose of the assignment.
    • The type of value reported and the definition of the value reported.
    • The effective date of the appraiser's opinions and conclusions.
    • Relevant property characteristics, including location attributes, physical attributes, legal attributes, economic attributes, the real property interest valued, and Non real estate items included in the appraisal, such as personal property, including trade fixtures and 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 to complete the assignment.
  • In communicating an appraisal report, each appraiser must ensure the following:

    • That the information analysis utilized in the appraisal was appropriate.
    • That significant errors of omission or commission were not committed individually or collectively.
    • That appraisal services were not rendered in a careless or negligent manner.
    • That a credible, supportable appraisal report was communicated.

    Most states require that real estate appraisers are state licensed or certified. The state licensed or certified appraiser is trained to render an unbiased opinion based upon extensive education and experience requirements. To become licensed or certified, appraisers must fulfill rigorous education and experience requirements. In addition, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

  • Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license current.

  • Typically, appraisers provide opinions for lenders, consumers, in litigation cases, tax matters and investment decisions. Their client is who orders the appraisal, but there may be more than one intended user.

  • Gathering data is one of the primary roles of an appraiser and there are a multitude of sources. Data can be divided into Specific and General. Specific data is gathered from the home itself. Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

    General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as Metro Appraisals' InterFlood product. And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.

  • Anytime the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal helps you set the most appropriate price. 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. 

  • PMI stands for Private Mortgage Insurance. It insures a lender against loss on homes purchased with a down-payment of less than 20%. Once equity in the home reaches 20% you can eliminate the PMI and start saving immediately.

  • The first step in most appraisals is the 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house. On the inside, make sure that the appraiser can easily access items like furnaces and water heaters.


  • Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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.

  • The owner of the appraisal report is the client -- the person or entity whom orders the appraisal. However, there still may be more than one intended users of the appraisal report.

  • The answer to this is different depending upon the location of the home. Different markets value amenities differently. Adding a central air conditioner in Houston, Texas may add significant value, while putting one in a home located in Buffalo, New York might actually have an opposite effect.

    As a rule, the most value returned 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 were second, returning 85%.

We are prepared to handle any concerns you might have about appraisals or real estate in the Puget Sound area. Don't hesitate to contact us today.