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Foster Appraisals has answers to "Frequently Asked Questions"

Foster Appraisals is always eager to answer any concerns you might have about appraisals in Coos County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would require your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what guarantee is there that the value conclusion is veritable?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Foster Appraisals get the information used to estimate values in Coos County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (Top)

An appraisal is a thought process allowing the appraiser to come to an opinion of value. The real estate appraiser must use a few "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, minus age and physical dilapidation, plus the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns making a comparison to similar houses close by. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. 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 produce.

What does an appraiser do?   (Top)

An appraiser forumlates a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers demonstrate their expert conclusions in appraisal reports.


What are the reasons a person would require your services?   (Top)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
  • To obtain a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest inflated property taxes.
  • If you need to settle an estate.
  • To give you a leg-up when purchasing a home.
  • To figure out an honest sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every property.
  • If you ever find yourself in a lawsuit.
For a more extensive explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Top)

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and appliances of a house, from the roof to the foundation. Usually, a home inspection report will explain the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Honestly, they have nothing in common. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are valid resources. In addition, the appraisal looks at other factors like condition, area and construction costs. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

Who's behind the report is frankly the biggest difference between a CMA and an appraisal. 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. A certified, state licensed professional who made a career on valuing properties in and around Coos 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 accept a flat fee for assignments, regardless of their value conclusion.

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

The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.(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 description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
  • 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 included in the activity of completing the appraisal.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what guarantee is there that the value conclusion is veritable?   (Top)

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

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

  • That appraisal services were done in a careful and conscientious fashion.

  • The final appraisal report was clear, legitimate and not easily discredited.
To become a state licensed appraiser, we must fulfill considerable education and experience requirements that train us to formulate an unbiased opinion. Likewise, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Licensing and certification takes coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Top)

Typically, appraisers are employed by lenders to render a value opinion on property involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Foster Appraisals get the information used to estimate values in Coos County or other areas?   (Top)

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

General data is collected from a variety of sources. To find out about recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays. 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 past experience in creating appraisals for other houses in the same market.


What can a full appraisal do for me?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. 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. Without knowing its real value, wise financial decisions are impossible.


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

PMI stands for Private Mortgage Insurance. It covers the lender if a borrower is unable to pay on the loan and the market price of the property is less 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.

Is PMI something increasing your monthly mortgage payment?Call Foster Appraisals today at (541) 267-4352 or send us an e-mail. Documentation of your home's present value could save you thousands.

Do you need anything from the homeowner in advance?   (Top)

The first step in most appraisals is the property 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. 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:
  • A survey or plot map of the property and building (if available).
  • Title policy that lists encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"?   (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."



Who actually owns the appraisal report?   (Top)

For mortgage transactions, the lender requests 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 hiring 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.


I want to get more for my house. Where should I spend money renovating?   (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, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, returning 85%. Adding bedrooms and baths can also boost 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.