Caliber Appraisal has answers to "Frequently Asked Questions"

Caliber Appraisal is more than happy to elaborate on any inquiries you might have about appraisals in King County. Contact Caliber Appraisal today to see how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to request services from Caliber Appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
After completing the report, what assurance is there that the final number is accurate?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does Caliber Appraisal get the data used to estimate values in King County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



Describe an appraisal   (Return to top)

The method of performing an appraisal deals with an evaluation which forms an opinion of value. The real estate appraiser will use a several "approaches," typically three, to conclude the estimation of market value. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which involves making a comparison to similar homes nearby. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a residential property. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (Return to top)

An appraiser offers an unprejudiced and well supported assessment of market value, often in the context of a real estate exchange. Appraisers show their analysis in appraisal reports.


What would cause me to request services from Caliber Appraisal?   (Return to top)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • If you need to settle an estate.
  • To offer you an edge when purchasing a home.
  • To find the most probable property value when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every house.
  • If you ever find yourself in a lawsuit.
If you need more information about the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Return to top)

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party investigation of the accessible structure and mechanical systems of a home, from the top to the foundation. For the most part, a home inspection report will explain the amenities and the requirements of the home: 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be blunt, it's night and day. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. Area and architectural costs are also a priority in an appraisal. All a CMA does is generate 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 most significant difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases their livelihood on valuing homes in and around King County is behind the appraisal. Moreover, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.

What's in an appraisal report?   (Return to top)

The main objective of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
  • 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.
  • The scope of work considered when completing the appraisal.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report


After completing the report, what assurance is there that the final number is accurate?   (Return to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal used a suitable analysis of the data.

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

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

  • The final appraisal report was transparent, sound and conclusive.
To become a state licensed appraiser, we must satisfy intense education and experience requirements that give us the background to produce an unbiased opinion. In addition, appraisers must obey a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he/she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Return to top)

Commonly, appraisers are called upon by lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Caliber Appraisal get the data used to estimate values in King County or other areas?   (Return to top)

Compiling data is one of the primary roles of an appraiser. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could 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 gathered from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.


Why should I hire a licensed appraiser?   (Return to top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to determine a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. 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 house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.


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

PMI stands for Private Mortgage Insurance. This supplemental policy takes care of the lender in the event a borrower defaults on the loan and the market price of the house is less than the balance of 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 house payment have a lineitem for PMI?Call Caliber Appraisal today at 206-535-9884 or send us an e-mail. Documentation of your home's present value could save you thousands.

Do you need anything from me in advance?   (Return to top)

The first step in most appraisals is the home inspection. 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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily available).
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?"   (Return to 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 has rights to the appraisal report?   (Return to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate 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.


Which home renovations add the most to the price?   (Return to 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. 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%. 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.