Residential Valuation has answers to "Frequently Asked Questions"

Residential Valuation is always prepared to address any inquiries you might have about appraisals in Clark County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to request your services?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the assignment is done, what assurance is there that the value indicated is valid?
What goes into an appraiser's certification?
Who hires Residential Valuation
Where does Residential Valuation get the data used to estimate values in Clark 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 appointment
Define "Market Value"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (See list of FAQ's)

An appraiser provides an evaluation that produces an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves finding what the improvements would cost less physical depreciation, plus the land value. Another of the approaches is the Sales Comparison Approach - which concerns finding a comparison to other similar nearby properties which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a house. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do?   (See list of FAQ's)

An appraiser offers an impartial and well substantiated opinion of market value, often in the context of a real estate purchase. Appraisers demonstrate their analysis in appraisal reports.


What would cause me to request your services?   (See list of FAQ's)

There are a lot of reasons to obtain an appraisal from Residential Valuation with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
  • To get a loan.
  • If you would like to reduce your property tax obligations.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight inflated property taxes.
  • If you need to settle an estate.
  • To give you a leg-up when purchasing real estate.
  • To figure out a likely property value when selling your home.
  • 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 be involved in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process about getting an appraisal.


What is the difference between an appraisal and a home inspection?   (See list of FAQ's)

Home inspectors do not estimate an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and appliances of a property, from the top to the foundation. Commonly, a home inspection report will discuss 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (See list of FAQ's)

To be blunt, it's like comparing sugar and saccharin. The CMA relies on vague trends in the market. The appraisal is based on similar proven comparable sales. The appraisal report will also include area and building values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person doing the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career 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 previously agreed upon sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report?   (See list of FAQ's)

The main purpose 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, one will customarily see 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 value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
  • 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 appraisal.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment is done, what assurance is there that the value indicated is valid?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis contained in the appraisal was proper.

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

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

  • The final appraisal report was understandable, legitimate and conclusive.
There are intense classroom and on the job experience requirements that must be met in order to achieve the title of "licensed appraiser" in Washington. Plus, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Licensing and certification requires coursework, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who hires Residential Valuation   (See list of FAQ's)

Commonly, appraisers are hired by mortgage lenders to estimate the value of property involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Residential Valuation get the data used to estimate values in Clark County or other areas?   (See list of FAQ's)

Collecting information is one of the main things an appraiser engages in. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is received from a numerous places. To look up recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

What can a full appraisal do for me?   (See list of FAQ's)

An appraisal is a worthwhile anytime the value of your home is relevant to some financial decision. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender in case a borrower doesn't pay on the loan and the value of the house is less than what is owed on 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.

Does your monthly loan payment have a lineitem for PMI?Call Residential Valuation today at 3605712181 or send us an e-mail. A new appraisal could save you thousands.

Should I do anything in advance of the appraisal appointment   (See list of FAQ's)

The first step in most appraisals is the home inspection. 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 the appraiser has easy access to the exterior of the house . Trim any bushes and relocate 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A survey or plot map of the property and building (if readily available).
  • Title policy that describes encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
  • A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (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.

Define "Market Value"   (See list of FAQ's)

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 actually owns the appraisal report?   (See list of FAQ's)

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 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.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, 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.

I want to get more for my house. Where should I spend money renovating?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. 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. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.