DuBose Appraisal Service has answers to "Frequently Asked Questions"


	DuBose Appraisal Service is always willing to reply to any questions you might have about appraisals or real estate in Washington County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to need your services?
What is the difference between an appraisal and 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 is done, what assurance is there that the value conclusion is trustworthy?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Washington County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
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? (Back to top)

The method of writing an appraisal consists of an investigation which forms an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or valuation. One of the three is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close vicinity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a property. The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (Back to top)

An appraiser offers a fair and credible assessment of market value, in the support of real property exchanges. Appraisers show their expert findings in appraisal reports.

What would cause me to need your services? (Back to top)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:

To get a loan.
To lower your tax burden.
To build a case for a homeowner's equity and remove PMI.
To challenge high property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing a home.
To determine an honest sales price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a lawsuit.

For a more extensive description of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (Back to top)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to evaluate the structure of the property from foundation to top. The standard house inspector's report will contain an evaluation of the integrity of the property'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)? (Back to top)

Honestly, they have nothing in common. The CMA utilizes market trends to create most of their business. An appraisal utilizes comparable sales that can be verified by public record. In addition, the appraisal looks at other factors like condition, location and replacement costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

What can I expect to see in my appraisal report? (Back to top)

The main objective 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 other intended users.
How the appraisal is supposed to be used.
The purpose of the assignment.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was involved in the activity of completing the job.

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

Once the report is done, what assurance is there that the value conclusion is trustworthy? (Back to top)

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

That the information analysis utilized in the appraisal was proper.

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

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

That a trustworthy, substantiated appraisal report was imparted.

There are intense education and real world experience requirements that must be met in order to become a licensed appraiser in Oregon. Plus, appraisers must stick to a stringent industry code of ethics and observe 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).

(Back to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and experience working under a supervisor. Once an appraiser is 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 employs appraisers? (Back to top)

Typically, appraisers are employed by mortgage lenders to estimate the value of a home involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Collecting information is one of the primary roles of an appraiser. Data can be classified as either Specific or General. Specific data is 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 numerous places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

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

Why should I hire a licensed appraiser? (Back to top)

If you're making 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 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. 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. Knowing its true value means you can make the right financial decisions.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI stands for Private Mortgage Insurance. This added policy takes care of the lender in case a borrower is unable to pay on the loan and the value of the house is less than the loan balance. 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.


	The savings from dropping your PMI pays for the appraisal in a matter of months. Nobody is more qualified than DuBose Appraisal Service when it comes to analyzing real estate appreciation in Portland and Washington County. Contact us today.

Should I do anything in advance of the appraisal inspection (Back 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 bushes and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

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

Records on the latest purchase of the property in the last three years.
List of personal property to be sold with the building.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (Back 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? (Back 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 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.

It's different when it's the homeowner engaging 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 use the appraisal for any purpose.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.