Crest Appraisal Services has answers to "Frequently Asked Questions"


	Crest Appraisal Services is prepared to talk to you about any questions you might have about appraisals in Des Moines and King County. Contact us today to see how we can help you with your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
What are the reasons a person would request your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the assignment has been delivered, how can I have confidence that the value conclusion is veritable?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in King 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 inspection
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Describe an appraisal (See list of FAQ's)

The appraisal process is an estimation that leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with finding similar houses in close proximity and figuring out the value based on making a comparison of those houses to the home being appraised. Being the most common approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does (See list of FAQ's)

An appraiser generates an objective and well substantiated determination of market value, in the support of real estate transactions. Appraisers summarize their professional analysis in appraisal reports.

What are the reasons a person would request your services? (See list of FAQ's)

There are a lot of reasons to get an appraisal from Crest Appraisal Services with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

If you are applying for a loan.
To reduce your tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To settle an estate.
To offer you a leg-up when purchasing a home.
To find an honest sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

Click here for a more extensive explanation of the process of getting an appraisal.

How is an appraiser different than a home inspector? (See list of FAQ's)

Appraisers do not do complete residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the home from foundation to top. For the most part, 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 integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply, they share nothing in common. The CMA depends on vague market trends. An appraisal utilizes comparable sales that can be verified by records. Area and building costs are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's doing the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Washington licensed professional who bases a career on valuing homes in and around King County is behind 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 flat sum for assignments, regardless of their value conclusion.

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

The main point of an appraisal report 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:

Who engaged the appraiser and other intended users.
The intended use of the report.
The purpose of the assignment.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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 to complete the assignment.

For a more detailed look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, how can I have confidence that the value conclusion is veritable? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

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

That appraisal services were provided in a careful and conscientious manner.

The final appraisal report was easy to explain, legitimate and not easily discredited.

There are rigorous classroom and practical experience requirements that must be met in order to get an appraisal license in Washington. In addition, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for carrying out 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 experience working under a supervisory appraiser. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in King County or other areas? (See list of FAQ's)

Gathering data is one of the primary functions of an appraiser. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (See list of FAQ's)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your house, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home 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? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. It protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your home value appreciated since you first purchased? Contact Crest Appraisal Services today at (206) 592-0600 to see if you can cancel your Private Mortgage Insurance payment.

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

We begin 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

Information on any written private agreements, such as a shared driveway with a neighbor.
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Information on "Homeowners Associations" or condominium covenants and fees.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
Most recent real estate tax bill and or legal description of the property.

What does "Market Value" mean? (See list of FAQ's)

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? (See list of FAQ's)

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 report - 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 scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (See list of FAQ's)

It really depends on the 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.