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Oregon Coast Appraisal Service has answers to "Frequently Asked Questions"

Oregon Coast Appraisal Service is prepared to reply to any inquiries you might have about appraisals or real estate in Lincoln County. Contact Oregon Coast Appraisal Service today to learn how we can help you with your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require your services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
After completing the report, how can I have certainty that the value indicated is valid?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does Oregon Coast Appraisal Service get the data used to estimate values in Lincoln County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (Return to top)

The procedure of performing an appraisal report consists of an investigation which forms an opinion of value. The appraiser must use a several "approaches," typically three, to draw up the estimation of market value. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves finding comparable houses nearby and discerning value based on comparing those houses to the home in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of 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 income produced by the property.

What does an appraiser do?   (Return to top)

An appraiser provides a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers demonstrate their findings in appraisal reports.


What would cause me to require your services?   (Return to top)

There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:
  • To receive a loan.
  • If you would like to reduce your property tax obligations.
  • To show a homeowner has 30% equity and remove PMI.
  • To challenge improperly assessed property taxes.
  • To settle an estate.
  • To give you an edge when purchasing a home.
  • To figure out a likely property value when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more detailed description of the appraisal process click here.


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

The appraiser is not a home inspector and does not do a full home inspection. An inspection is a third-party investigation of the livable structure and appliances of a property, from the roof to the bottom. The stereotypical home inspector's report will include 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 visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

My agent performed a CMA for me. Is that the same as an appraisal?   (Return to top)

Simply put, it's like comparing broadband and dial-up. The CMA utilizes market trends to generate most of their business. The appraisal is reliant on similar valid comparable sales. The appraisal report will also contain location and construction values. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is hands down the biggest difference between a CMA and an appraisal. A CMA is written 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 a career on valuing properties in and around Lincoln County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their value conclusion.

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

Each appraisal should demonstrate a believable value opinion and will identify the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even 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 considered while working up the job.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report


After completing the report, how can I have certainty that the value indicated is valid?   (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis implemented in the appraisal was suitable.

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

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

  • The final appraisal report was easy to explain, sound and conclusive.
To become a state licensed appraiser, we must meet intense education and experience requirements that train us to produce an unbiased opinion. Likewise, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification is achieved through classroom study, tests and real world experience. Once licensed, he/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?   (Return to top)

Most of the time, appraisers are hired by mortgage lenders to estimate the value of a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Oregon Coast Appraisal Service get the data used to estimate values in Lincoln County or other areas?   (Return to top)

Gathering data is one of the primary things an appraiser does. Data can be split into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is collected from a number of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.


How can a licensed appraiser help me?   (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. 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. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Oregon Coast Appraisal Service is the best documentation to ensure assets are split up fairly. Simply put, a house 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?   (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower 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 Oregon Coast Appraisal Service today at 5412653012 to see if you can cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (Return to top)

We start with an inspection of the home. 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. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Any records on the purchase of the property for the last three years.
  • List of personal property to be sold with the building.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean?   (Return to top)

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."



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

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed 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 stipulated otherwise, the home owner can use the appraisal for any purpose.


Are some home improvements more worthwhile than others?   (Return to top)

The added value of a particular amenity truly depends on the local market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the most value returned from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.