Armstrong Appraisals, Inc. has answers to "Frequently Asked Questions"


	Armstrong Appraisals, Inc. is always more than happy to answer any questions you might have about appraisals in Wenatchee and Chelan County. Contact Armstrong Appraisals, Inc. today to learn how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to require your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the assignment has been completed, how can I have confidence that the value conclusion is accurate?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does Armstrong Appraisals, Inc. get the information used to estimate values in Chelan County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (Top)

The method of producing an appraisal report deals with an investigation which leads to an opinion of value. This opinion or estimate is figured by a formal method that commonly utilizes the three main "common approaches to value". The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves discerning what the improvements would cost less physical degradation, adding the land value. Another of the methods is the Sales Comparison Approach - which involves discovering a comparison to other similar nearby properties which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a house. 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 income generated by the property.

What does an appraiser do? (Top)

An appraiser produces a fair and credible assessment of market value, in the support of real estate transactions. Appraisers illustate their conclusions in appraisal reports.

What would cause me to require your services? (Top)

There are a lot of reasons to purchase an appraisal from Armstrong Appraisals, Inc. with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal include:

To obtain 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 challenge 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 the most probable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
If you ever find yourself in a lawsuit.

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

What is the difference between an appraisal and a home inspection? (Top)

Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to evaluate the structure of the property from foundation to rooftop. Usually, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, 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 visible structures.

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

To be blunt, it's like comparing opera to country. The CMA uses market trends to create most of their business. Appraisals use similar sales which are verifiable resources. Also, the appraisal looks at other factors like condition, area and construction costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

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 makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the price of the home.

What does the appraisal report contain? (Top)

Every report should reflect a supported value opinion and will document 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.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, 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 considered while working up the job.

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

Once the assignment has been completed, how can I have confidence that the value conclusion is accurate? (Top)

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

That the information analysis utilized in the appraisal was proper.

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

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

The final appraisal report was transparent, sound and defensible.

There are intense education and on the job experience requirements that must be satisfied in order to get an appraisal license in Washington. Likewise, appraisers must follow a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification is achieved through coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (Top)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Armstrong Appraisals, Inc. get the information used to estimate values in Chelan County or other areas? (Top)

One of the main tasks an appraiser engages in is to gather property data. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

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

And most importantly, the appraiser assembles 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)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. When selling your home, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. 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. Without knowing its real value, wise financial decisions are impossible.

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

PMI stands for Private Mortgage Insurance. It protects the lender in the event a borrower defaults on the loan and the value of the home is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Is PMI something increasing your monthly mortgage payment?Call Armstrong Appraisals, Inc. today at 509 667 9675 or send us an e-mail. Documentation of your home's current value could save you thousands.

Should I do anything in advance of the appraisal inspection (Top)

We begin with an inspection of the home. 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 we have easy access to the exterior of the house . Trim any bushes and move any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

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 available).
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, septic systems and your well.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?" (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 has rights to the appraisal report? (Top)

In most real estate transactions, the appraisal is ordered by the lender. 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 certainly 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 cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (Top)

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.