Aspen Appraisal Services has answers to "Frequently Asked Questions"

Aspen Appraisal Services is always more than happy to handle any questions you might have about appraisals in Marion County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons a person would need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Once the appraisal is done, what guarantee is there that the final number is valid?
How hard is it to become certified?
Who are an appraiser's customers?
Where does Aspen Appraisal Services get the data used to estimate values in Marion County or other areas?
Why do I need a professional appraisal?
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
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Top)

The method of performing an appraisal report deals with an estimation which forms an opinion of value. This opinion or estimate is arrived at through the use of a formal method that typically uses three "common approaches to value". One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar properties within a close proximity which have recently sold. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.

What does an appraiser do?   (Top)

An appraiser offers a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers present their findings in appraisal reports.


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

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To challenge inflated property taxes.
  • To deal with an estate.
  • To offer you an edge when purchasing real estate.
  • To find a likely price when selling your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a civil case.
Click here for a more detailed explanation of the process dealing with getting an appraisal.


How is an appraisal different than a home inspection?   (Top)

Appraisers do not do perform home inspections and are not home inspectors. A third-party home inspector will judge the structure of the home, from the top to the bottom. The archetypal house inspector's report will contain an evaluation of the condition of the property's heating systems, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Top)

To be honest, they have nothing in common. What the CMA relies upon are ill-defined trends. An appraisal relies on comparable sales that can be verified by records. In addition, the appraisal verifies other factors like condition, area and replacement costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is actually 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 bases their livelihood on valuing properties in and around Marion 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 sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain?   (Top)

Every report should reflect a believable estimate of value and should identify the following:
  • The client and other intended users.
  • The intended use of the report.
  • 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!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
  • All 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 entailed in the activity of completing the job.
For a more detailed view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal is done, what guarantee is there that the final number is valid?   (Top)

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 critical errors contained in the appraisal, nor any material details left out.

  • That appraisal services were delivered in a careful and judicious manner.

  • The final appraisal report was transparent, sound and conclusive.
To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be attained. Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured 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/she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Aspen Appraisal Services get the data used to estimate values in Marion County or other areas?   (Top)

Compiling data is one of the primary occupations of an appraiser. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a many places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays. Appraisers often need to report when a property lies 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 assimilates general data from his or her past experience in doing assignments for other houses in the same market.

Why do I need a professional appraisal?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal will help you determine the most appropriate price. 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. A house 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 is an acronym for Private Mortgage Insurance. It takes care of the lender in the event a borrower defaults on the loan and the market price of the house is less than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Does your monthly mortgage payment have a lineitem for PMI?Call Aspen Appraisal Services today at 503-871-1949 or send us an e-mail. A current appraisal could save you thousands.

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

We start with an inspection of the property. 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 condition of its amenities. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
  • Any records on the purchase of the property for the last three years.
  • A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
  • Title policy that lists encroachments or easements.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (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."

Once complete, who actually owns the appraisal report?   (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 certainly 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state how the appraisal can be used; 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.

How can I get the most ROI out of home improvements?   (Top)

The answer to this is different depending upon the location of the home. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the best ROI 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, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.