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Spyglass Valuation Services (541) 347-1150 has answers to "Frequently Asked Questions"

Spyglass Valuation Services (541) 347-1150 is always more than happy to elaborate on any inquiries you might have about appraisals in Coos County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would a person 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's in an appraisal report?
Once the report is done, what assurance is there that the value indicated is veritable?
How difficult is it to become certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Coos 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?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (Return to top)

An appraisal is a thought process allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves discerning what the improvements would cost minus physical depreciation, plus the land value. The Sales Comparison Approach involves finding comparable homes in the vicinity and finding value based on comparing those homes to the house in question. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a house. The third approach is the Income Approach, which is the most important method 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   (Return to top)

An appraiser generates an unbiased and well substantiated opinion of market value, in the support of real estate transactions. Appraisers illustate their analysis in appraisal reports.


Why would a person require a real estate appraisal?   (Return to top)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To fight high property taxes.
  • If you need to take care of an estate.
  • To give you an edge when purchasing real estate.
  • To find the most probable property value when selling 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 house.
  • If you ever find yourself in a lawsuit.
Click here for a more detailed explanation of the process dealing with getting an appraisal.


Is an appraisal the same as a home inspection?   (Return to top)

Appraisers do not do perform house inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from basement to top. The usual home 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Return to top)

Frankly, it's like comparing Shakespeare to reality TV. The CMA relies on indistinct trends in the market. Appraisals use comparable sales which are valid resources. The appraisal report will also contain neighborhood and building prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's doing the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living 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 flat fee for assignments, regardless of their outcome.

What's in an appraisal report?   (Return to top)

The main point of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraisal.
  • Pertinent property characteristics, including: location, physical description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
  • 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 assignment.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report


Once the report is done, what assurance is there that the value indicated is veritable?   (Return to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • That the information analysis contained in the appraisal was suitable.

  • Whether individually or collectively, there were no crucial errors contained in the report, nor any relevant details left out.

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

  • The final appraisal report was clear, credible and defensible.
To become a state licensed appraiser, there are education requirements as well as practical experience that must be logged - all with the objective of gaining the skills required to render unbiased value opinions. Likewise, appraisers must follow a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification takes classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she is required to complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers?   (Return to top)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Coos County or other areas?   (Return to top)

One of the most important things an appraiser does is to assimilate data. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assimilates 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?   (Return to top)

If you're involved in some sort of financial decision and the value of your home matters, you'll want an appraisal. For those selling a home, you'll want to determine the 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. For parties settling an estate or divorce, an appraisal from Spyglass Valuation Services (541) 347-1150 is the best documentation to ensure assets are split up properly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (Return to top)

PMI is an acronym for Private Mortgage Insurance. This supplementary plan protects the lender in case a borrower doesn't pay on the loan and the market price of the property is less 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.

Did you secure your mortgage with less than 20% down? Contact Spyglass Valuation Services (541) 347-1150 today at 5413471150 to see if you can save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection   (Return to top)

We begin with an inspection of the property. 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. The best thing you can do to help is make 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 make it difficult to measure the structure. Indoors, make sure the appraiser can get to appliances 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 survey or plot map of the property and building (if available).
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?"   (Return to 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."



Does the appraisal belong to the bank or the consumer?   (Return to top)

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 certainly entitled to a copy of the report - 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 hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (Return to top)

This really depends on where the home is. 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.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.