| FAQ's Q: What is an appraisal?
A: An appraisal is an independent, unbiased estimate of the value of real property. The preparation of an appraisal involves research into appropriate market areas, the assembly and analysis of information pertinent to a property, and the knowledge, experience and professional judgment of the appraiser. | Q: Why should I get an appraisal?
A: Have you ever bought or sold a house? Inherited property? Donated property? Served as the executor of an estate? Given up part of your property through a right of way taking? If so, then you have probably needed an appraisal. Some of the most common reasons to get an appraisal are: -
Mortgage Lending: Most mortgage transactions involve an appraisal. Generally, financial institutions will only approve a mortgage after contracting for an independent appraisal to document the value of the property which serves as collateral for the loan. -
Removal of PMI: Many times an appraisal is the only way to get your PMI (private mortgage insurance) removed from your mortgage. Depending on the amount of PMI you are paying, these savings alone can more than pay for the appraisal. -
Divorce: No one wants to think about divorce, but it happens. An appraisal can help make the process a little easier by having a third party assess the value of your home for dissolution purposes. -
Estates: The value of an estate should be determined for proper distribution, as well as for tax purposes. -
Insurance: Residential and commercial properties are often appraised to identify appropriate insurance coverage. An appraisal can be key to protecting your interest in many financial dealings. A professional appraisal can keep you from selling too low, paying too much, being over- or under-insured or not getting your fair share in a division of property. | Q: How does an appraiser estimate value?
A: Appraisers are taught to estimate value following three recognized approaches to value. -
Sales Comparison Approach: Compares similar, recently sold properties to the property being appraised. -
Income Approach: Estimates what a prudent investor would pay for the property based on the income this property produces. -
Cost Approach: Estimates the cost to replace or reproduce the property being appraised. Through consideration of results of the analysis conducted, an appraiser then develops a final estimate or opinion of value. | Q: How do I choose a good appraiser?
A: In Washington State, appraisers must be certified by the Department of Licensing. A Certified Real Estate Appraiser (CREA) has met certain standards of education and experience and passed a professional proficiency examination before being certified. Certified appraisers must also complete continuing education to remain certified. A competent appraiser will perform your appraisal in compliance with the current annual edition of the Uniform Standards of Professional Appraisal Practice (USPAP). |
A: USPAP (Uniform Standards of Professional Appraisal Practice) is the generally accepted set of standards of professional appraisal practice in North America. It is published annually by the the Appraisal Standards Board of the Appraisal Foundation. In the United States, USPAP is recognized by state real estate appraiser licensing agencies, Federal bank regulatory agencies and many other Federal, state and local authorities. In addition, many professional appraisers in Europe, Central and South America, and Asia are also beginning to practice in compliance with USPAP. | |
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