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Winn Appraisal Services has answers to "Frequently Asked Questions"

Winn Appraisal Services is always eager to address any questions you might have about appraisals or real estate in Lake Oswego and Washington County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person need services from Winn Appraisal Services?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the value conclusion is legitimate?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does Winn Appraisal Services get the information used to estimate values in Washington County or other areas?
Why should I hire a licensed appraiser?
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 appointment
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (List of questions)

The method of writing an appraisal report consists of an inspection which leads to an opinion of value. This opinion or estimate is found by a formal process that typically utilizes three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find the value of a property; it involves discerning what the improvements would cost without physical depreciation, adding the land value. Another of the processes is the Sales Comparison Approach - which involves finding a comparison to other similar nearby properties which have recently sold. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a home. 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 capital produced by the property.

What does an appraiser do?   (List of questions)

An appraiser provides an objective and well substantiated determination of market value, to be used in making real estate transactions. Appraisers demonstrate their professional analysis in appraisal reports.


Why would a person need services from Winn Appraisal Services?   (List of questions)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
  • To obtain a loan.
  • To reduce your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To contest high property taxes.
  • To settle an estate.
  • To offer you an edge when purchasing a home.
  • To find a reasonable sales price when selling your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process involved in getting an appraisal.


How is an appraiser different than a home inspector?   (List of questions)

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the available structure and mechanical systems of a house, from the roof to the bottom. The archetypal property inspector's report will include an evaluation of the condition 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)?   (List of questions)

Frankly, they have nothing in common. What the CMA relies upon are superficial trends. An appraisal relies on comparable sales that can be verified by records. Also, the appraisal checks other factors like condition, area and replacement costs. 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 most significant factor is the person doing the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Washington County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (List of questions)

The main purpose 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.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property characteristics, including: location, physical description, legal attributes, economic factors, 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 factors.
  • 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.
  • What was entailed in the process of completing the appraisal.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what assurance is there that the value conclusion is legitimate?   (List of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was suitable.

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

  • That appraisal services were not rendered in a careless or negligent manner.

  • That a believable, defensible appraisal report was communicated.
There are rigorous classroom and experience requirements that must be satisfied in order to achieve the designation of "licensed appraiser" in Oregon. Likewise, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification takes coursework, tests and experience working under a supervisor. 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 engages the services of appraisers?   (List of questions)

Mortgage lenders are an appraiser's typical client, needing their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Winn Appraisal Services get the information used to estimate values in Washington County or other areas?   (List of questions)

Gathering information is one of the primary functions of an appraiser. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is received from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we look at tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

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.


Why should I hire a licensed appraiser?   (List of questions)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your home, an appraisal will help you determine 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. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is short for for Private Mortgage Insurance. This supplemental policy protects the lender in case a borrower is unable to pay on the loan and the value of the home is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Does your monthly house payment include a fee for PMI?Call Winn Appraisal Services today at (503)639-5053 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal appointment   (List of questions)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its features. On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Title policy that lists encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"?   (List of questions)

In real estate appraising, 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?   (List of questions)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


Are some home improvements more worthwhile than others?   (List of questions)

The added value of a particular amenity truly depends on the local market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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 were second, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.