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Commonly Asked Questions About Appraisals
What is an appraisal?
An appraisal is a professional appraiser’s opinion of the quality, value or utility of a specific property.
Appraisals may be required for just about any type of property, including single-family homes, apartment buildings and condominiums, office buildings, shopping centers, industrial sites and farms.
The reasons for performing a real estate appraisal are just as varied. An appraisal may be required:
- for mortgage lending purposes
- for tax assessments and appeals of assessments
- during negotiations between buyers and sellers
- when the government acquires private property for public use
- for pending business mergers or dissolutions
- In short, appraisals are usually required whenever real estate is sold, mortgaged, taxed, insured or developed.
What is involved in the appraisal process?
The preparation of an appraisal involves research into appropriate market areas, the assembly and analysis of information pertinent to a property, and the knowledge, experience and professional judgment of the appraiser.
The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property—providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate.
The value indicated by recent sales of comparable properties, the current cost of reproducing or replacing a building, and the value that the property’s net earning power will support are the most important considerations in the valuation of real property.
What qualifications must appraisers have?
As a result of federal legislation passed in 1991, real estate appraisers in the United States must be licensed or certified by their state to appraise certain types of "federally related real estate transactions."
All 50 states have education, experience and exam requirements to obtain a real estate appraiser license or certification. The Oregon Appraiser Certification & Licensure Board licenses and regulates certified and licensed real estate appraisers and registered appraiser assistants in Oregon.
The well-credentialed appraisers at Duncan & Brown bring knowledge, experience, impartiality and trust to the real estate transaction. In so doing, clients can make sound decisions regarding the real property.
What kind of information should be considered when hiring an appraiser?
- Are they licensed or certified in the state in which they live?
- What professional designations do they have and from what organizations?
- How long have they been in practice?
- What level of experience do they have in this particular market and with this type of property?
- Are they familiar with property in this neighborhood?
- What types of clients have they had (homeowners, lenders, relocation companies, government agencies)?
Duncan & Brown is pleased to provide all of the above information on our website, or you may contact us with any questions about our qualifications and services.
Information provided by Appraisal Institute and Appraisal Foundation.
Perhaps the most often asked question at the Oregon Appraiser Certification and Licensure Board office pertains to letters of assignments and/or changing the client's name on an appraisal report.
Usually, the scenario goes something like this:
A lender or mortgage broker (Lender A) orders an appraisal, which the appraiser completes and delivers. Then the borrower decides to switch to a different lender/broker (Lender B).
Lender A issues an "assignment letter," which ultimately ends up in the hands of the appraiser. It is not necessary for the appraiser to obtain an assignment letter or permission from Lender A to re-appraise the property for Lender B.
The engagement to perform an appraisal from Lender B constitutes an entirely new assignment. There is no rule in USPAP or in the Oregon Administrative Rules that requires an appraiser to wait six months (or any amount of time) before re-appraising the same property.
Please contact an appraiser at Duncan & Brown for more information regarding options for a new appraisal assignment.
Keith, Bob. "The final word on assignment letters." The Oregon Appraiser Summer 2003: 2-3. Excerpted with permission.
The Appraisal Foundation also provides facts for consumers regarding property appraisals and selecting an appraiser.