What you should know about appraisals
This is the second in a three-part series on appraisals from guest contributor Sara Goodwin. Goodwin specializes in residential real estate appraisals in the Portland, Oregon, area. Read on for her guest post on the makings of an appraisal.
What is an appraisal?
An appraisal determines value. The value is usually a single number that the appraiser lists as an opinion of value per the day of the inspection of the subject property. However, the value can be expressed as a range or it can be as of a future or past date depending on the scope of work and what the client’s reason is for the appraisal.
A report is usually in writing, but can also be given as an oral report. A written report will often include at least one of the following approaches to value:
- Sales comparison approach
- Cost approach
- Income approach
Reports may include site and neighborhood information, photos of the exterior and interior of the property, photos of comparable properties used in the report, a sketch of the building and an addendum.
The addendum is a statement with narrative information provided by the appraiser to fully explain how the determination of value was reached so that the intended user is well-informed.
Life of an appraisal
In a stable market, an appraisal might be good for 12 months. In today’s ever-changing market, however, an underwriter might decline an appraisal that is less than 6 or even 3 months old. The longevity of an appraisal is often determined by the lender, client or appraiser who must use his or her own judgment to decide whether a secondary inspection is prudent.
Once an appraiser has completed an appraisal on a property, they have much of the information they need for a second report if one is requested in the future. Often, it is wise for the homeowner or client to keep the appraiser’s name on file in case they are in need of another appraisal down the road.
Sara Goodwin specializes in residential real estate appraisal services throughout Northwest Oregon and Southwest Washington. To contact Goodwin, call (503) 943-9200 or email her. To learn more about Goodwin and her appraisal services, visit her website.
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