Hise Appraisal Service has answers to "Frequently Asked Questions"


	Hise Appraisal Service is eager to address any concerns you might have about appraisals or real estate in Portland and Multnomah County. Contact Hise Appraisal Service today to learn how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons I would request services from Hise Appraisal Service?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the report, what assurance is there that the value indicated is valid?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Multnomah County or other areas?
How can a licensed appraiser help me?
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
Define "Market Value"
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (Back to top)

The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is concluded through a formal process that generally uses the three main "common approaches to value". One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which deals with finding a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a home. The Income Approach is mainly 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 would bring in.

What does an appraiser do? (Back to top)

An appraiser offers a fair and credible determination of market value, to be used in making real estate transactions. Appraisers summarize their expert conclusions in appraisal reports.

What are the reasons I would request services from Hise Appraisal Service? (Back to top)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove PMI.
To contest high property taxes.
If you need to settle an estate.
To provide you a leg-up when purchasing real estate.
To figure out a reasonable property value when listing your home.
To defend 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 lawsuit.

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

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

Appraisers do not do perform house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the property, from the roof to the foundation. Commonly, a home inspection report will evaluate 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)? (Back to top)

Frankly, they share nothing in common. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are valid resources. In addition, the appraisal looks at other factors like condition, area and building costs. 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.

But the largest differentiator is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Oregon licensed professional who bases their livelihood on valuing properties in and around Multnomah 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 previously agreed upon sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain? (Back to top)

Each report should demonstrate a supported value opinion and should document the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The reason for the assignment.
The type of value reported and a definition of that value.
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 factors, 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 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 assignment.

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

Upon completion of the report, what assurance is there that the value indicated is valid? (Back to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis implemented in the appraisal was suitable.

Whether individually or collectively, there were no significant errors contained in the report, nor any material details left out.

That appraisal services were not conducted in a careless or negligent manner.

The final appraisal report was transparent, credible and not easily discredited.

There are intense classroom and on the job experience requirements that must be fulfilled in order to become a licensed appraiser in Oregon. Likewise, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and experience working under a supervisory appraiser. Once licensed, he or she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Back to top)

Typically, appraisers are hired by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Multnomah County or other areas? (Back to top)

One of the primary activities of an appraiser is to compile property data. Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a number of places. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Appraisers often have 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 most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (Back to top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. 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. When buying, be sure you're not overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Hise Appraisal Service is the best documentation to ensure assets are split up 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? (Back to top)

PMI stands for Private Mortgage Insurance. It protects the lender if a borrower doesn't pay on the loan and the value 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.


	The money you keep from dropping your PMI will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Hise Appraisal Service when it comes to analyzing real estate appreciation in Portland and Multnomah County. Contact us today.

Should I do anything in advance of the appraisal appointment (Back to 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. 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 . Trim any shrubs and move 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Any records on the purchase of the property for the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A list of "suggested" improvements if the property is to be appraised "as complete".

Define "Market Value" (Back to 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? (Back to top)

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 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 hires an appraiser directly. 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 noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Back to top)

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned 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, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.