South Sound Appraisal, Inc. has answers to "Frequently Asked Questions"

South Sound Appraisal, Inc. is prepared to reply to any inquiries you might have about appraisals in Pierce County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would need a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what guarantee is there that the value conclusion is veritable?
How hard is it to become certified?
Who do appraisers work for?
Where does South Sound Appraisal, Inc. get the data used to estimate values in Pierce County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (See list of FAQ's)

The process of performing an appraisal consists of an evaluation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a home. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

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

An appraiser provides a professional, unbiased opinion of market value, often in the context of a real estate sale. Appraisers illustate their expert conclusions in appraisal reports.


What are the reasons I would need a real estate appraisal?   (See list of FAQ's)

There are many reasons to get an appraisal from South Sound Appraisal, Inc. with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To challenge inflated property taxes.
  • If you need to settle an estate.
  • To give you a leg-up when purchasing real estate.
  • To find the most probable price when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
For a more extensive description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (See list of FAQ's)

Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the home from bottom to top. The archetypal house inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

To be blunt, it's night and day. What the CMA depends on are vague trends. Appraisals use similar sales which are verifiable resources. In addition, the appraisal verifies other factors like condition, area and replacement costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is created by a licensed, certified professional who makes a living 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 flat sum for work they perform, regardless of their value conclusion.

What are the contents of an appraisal report?   (See list of FAQ's)

Every report must reflect a supported value opinion and should identify the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The purpose of the assignment.
  • 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 attributes, legal attributes, economic factors, the real property interest 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 job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what guarantee is there that the value conclusion is veritable?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal used analysis of the information.

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

  • That appraisal services were not executed in a careless or negligent fashion.

  • The final appraisal report was understandable, credible and not easily discredited.
There are rigorous education and real world experience requirements that must be satisfied in order to get an appraisal license in Washington. Plus, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (See list of FAQ's)

Most of the time, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does South Sound Appraisal, Inc. get the data used to estimate values in Pierce County or other areas?   (See list of FAQ's)

Compiling data is one of the main tasks an appraiser does. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from 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 whenever your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from South Sound Appraisal, Inc. is the best way to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI stands for Private Mortgage Insurance. It guards the lender if a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes 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.

Has your real estate appreciated since you first purchased? Contact South Sound Appraisal, Inc. today at (253)312-3293 to see if you can cancel your Private Mortgage Insurance premium.

How do I get ready for the appraiser?   (See list of FAQ's)

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. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

What is "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."

Does the appraisal belong to the bank or the consumer?   (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 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 engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define 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 use the appraisal for any purpose.

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

It really depends on the market. 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. 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 were second, 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.