Inland Empire Appraisal Blog

This chart shows a 6-month rolling average of the median sales price for all residential properties in each city. It shows the market stabilizing over the past two months, which is consistent with what I've been finding on appraisal assignments. The Spring market is trying to get in gear. What are your thoughts?



Open Interactive Chart

Divorce is a difficult and emotional process, and the division of assets can often be one of the most contentious issues to resolve. One asset that is particularly important to consider in a divorce settlement is real estate. Whether it's the family home or investment property, determining the value of real estate is crucial for an equitable settlement.

That's where a real estate appraisal service comes in. An appraisal is an unbiased opinion of the value of a property based on an assessment of its physical condition, location, and comparable sales in the area. In a divorce settlement, an appraisal can help ensure that both parties receive a fair share of the property's value.

Here are some reasons why you should consider using a real estate appraisal service for your divorce settlement:

1. Objective assessment: An appraisal provides an objective assessment of the property's value, which can help avoid disputes between the parties. Since the appraiser is an unbiased third-party, their assessment is not influenced by emotional attachment or personal bias.

2. Accurate valuation: Appraisals are conducted using industry-standard methodologies, which ensures that the valuation is accurate and reliable. This is important in a divorce settlement, where the value of the property will determine the division of assets.

3. Legal compliance: In many states, an appraisal is required for the division of marital assets. Using a professional appraisal service ensures that you comply with legal requirements and can help prevent legal challenges to the settlement.

4. Time-saving: Using a real estate appraisal service can save time and reduce stress. The appraiser will handle the entire process of assessing the property, including research, site visits, and report preparation.

5. Support for negotiations: If there are disputes about the value of the property, an appraisal report can provide objective evidence to support negotiations or mediation. This can help both parties reach a settlement that is fair and equitable.

If you're going through a divorce and need to determine the value of real estate assets, consider using a professional appraisal service. An appraisal can help ensure that both parties receive a fair share of the property's value, and can provide objective evidence to support negotiations or mediation. A real estate appraisal service can help make the process smoother, faster, and less stressful, so you can focus on moving forward after your divorce.

Here are some updated statistics for market conditions in Spokane County. Median Sale Price has been declining since the peak in May 2022 and is now the lowest we've seen since the winter of 2021-2022.

USPAP stands for the Uniform Standards of Professional Appraisal Practice, which is a set of guidelines that governs the work of real estate appraisers in the United States. USPAP is developed and maintained by the Appraisal Foundation, a non-profit organization established by Congress in 1987. The purpose of USPAP is to promote and maintain a high level of professionalism in the field of real estate appraisal by establishing standards for the appraisal process and promoting ethical conduct among appraisers.

USPAP is updated every two years to reflect changes in the real estate market and new developments in the field of appraisal. The standards cover all aspects of the appraisal process, including the appraiser's responsibilities, the development and reporting of the appraisal, and the ethical and professional conduct of the appraiser.

Some of the key requirements of USPAP include:

1. Competency: Appraisers must have the necessary knowledge and experience to complete an appraisal competently.

2.Independence: Appraisers must be independent and impartial in their work and not have any conflicts of interest that could affect the outcome of the appraisal.

3.Scope of Work: Appraisers must define the scope of their work and report their findings in a clear and concise manner.

4. Ethics: Appraisers must adhere to ethical standards, including maintaining confidentiality, disclosing any conflicts of interest, and avoiding any activities that could damage their professional reputation.

In addition to these requirements, USPAP also establishes specific standards for different types of appraisals, such as residential, commercial, and industrial properties. USPAP is widely recognized as the industry standard for real estate appraisals in the United States and is used by appraisers, lenders, and other industry professionals to ensure that appraisals are completed in a fair and professional manner.

Real estate appraisal, the process of determining the value of a piece of property, has a long and varied history that dates back to ancient civilizations. In this blog post, we will explore the evolution of real estate appraisal from its earliest origins to the present day.

Ancient Appraisal Methods

The ancient Egyptians and Babylonians are among the earliest civilizations known to have used some form of appraisal to value land and property. In ancient Egypt, scribes would inspect land and buildings and record their findings on papyrus scrolls, which were used to determine the value of the property. In Babylon, officials would use a system of weights and measures to value land and property.

The Greeks and Romans also had their own methods of real estate appraisal. The Greek philosopher Aristotle believed that the value of land was determined by its ability to produce an income, while the Roman Empire relied on appraisers to determine the value of land and buildings for tax purposes.

Modern Appraisal Techniques

During the Middle Ages, real estate appraisal began to take on a more formalized structure. In England, property values were determined by a system of valuation known as "rating." Appraisers would visit each property in a given area and assign it a rating based on factors such as its location, size, and condition. These ratings were used to determine the property's value for tax purposes.

The Industrial Revolution brought about significant changes in the field of real estate appraisal. The introduction of mass-produced building materials, such as bricks and concrete, led to the development of new valuation methods that took into account the cost of construction. Appraisers would use these methods to determine the replacement cost of a building, which became a standard method of real estate valuation.

In the United States, the field of real estate appraisal was further developed in the early 20th century. In 1913, the first professional association of real estate appraisers, the Society of Real Estate Appraisers (now known as the Appraisal Institute), was founded. The organization set standards for appraisals and promoted ethical conduct among its members.

In the 1930s, the United States government established the Federal Housing Administration (FHA), which introduced new appraisal standards to ensure that homes being purchased with FHA-insured mortgages were properly valued. The FHA's appraisal guidelines became the basis for many of the appraisal standards still in use today.

Modern real estate appraisals typically use a combination of methods, including the cost approach, sales comparison approach, and income approach. The cost approach involves estimating the cost of replacing a building with a similar one, while the sales comparison approach involves comparing the property to similar properties that have recently sold. The income approach is mostly used for commercial properties and involves analyzing the income generated by the property.

Conclusion

Real estate appraisal has a long and varied history, from the ancient civilizations of Egypt and Babylon to the modern methods used today. Throughout the centuries, the field has evolved to become a sophisticated and standardized practice that helps to ensure fair and accurate property valuations. As the real estate industry continues to grow and change, real estate appraisal will undoubtedly continue to evolve with it.

When you apply for an FHA mortgage to purchase or refinance your home, the appraisal that is completed as part of that transaction must be done by a state certified appraiser who is also on the FHA appraiser roster. And, the appraisal must follow specific guidelines that are detailed in HUD Handbook 4000.1. The appraisal guidelines are referred to as Minimum Property Requirements (MPR) for existing homes, or Minimum Property Standards (MPS) for new or proposed construction. If your lender has ordered an FHA appraisal for your mortgage application, it might help to know what to expect.

FHA appraisals are very much like appraisals completed for conventional financing. The appraiser will use the same methods to analyze the subject property, the neighborhood, market conditions, and other factors that impact its value. The main difference with an FHA appraisal is that it must meet those MPR or MPS guidelines, or the lender will require repairs before they close the loan. The only exception to this rule is that a lender may allow what is called an "escrow holdback" in some cases. For instance, if the home requires exterior paint repair but it is winter, so it is too cold to paint. If utilized, the escrow holdback means that money is set aside from the loan proceeds to cover required repairs when circumstances allow, like when it's warm enough to apply paint.

Paint is actually one of the big MPR issues that tends to come up, as this is a main difference between FHA and conventional financing. FHA requires that any defective exterior paint surface on any of the improvements be corrected. This includes sheds, fences, patio covers... anything that has defective paint. Defective paint includes cracking, peeling, bubbling, chipping or absence of paint that exposes wood to the elements. If the home is built in 1978 or earlier, this is especially important because much of the paint used before then is lead-based, which poses a risk to the health and safety of the home's occupants. In fact, homes built in 1978 or earlier have an additional requirement that any interior defective paint must also be repaired, and all paint chips removed from the site and properly disposed of.

FHA also requires that all appliances and mechanical systems be functional, windows that are designed to open are operational, and light and plumbing fixtures all work. The FHA appraiser must test these items, and require repair if any defects are found. This is a bit funny sometimes. For example, FHA doesn't require a home to have a dishwasher, but if one is installed, they require that it works. Sometimes it makes more sense just to remove a component that doesn't work to avoid issues. The same goes for air conditioners. The home doesn't need one, but if it has one, it needs to work. This can cause a bit of frustration with homeowners as it seems counter-intuitive, but a little planning can often avoid a headache.

One other important requirement for FHA appraisals is the need to complete a "head-and-shoulders" inspection of the attic and crawl spaces, if any. Conventional appraisals don't require this added step, but FHA requires a photo in the report to demonstrate that the appraiser at least looked into those spaces to check if there are any obvious issues.

It is very important to keep in mind that the appraiser is not a home inspector, and is only expected to identify fairly obvious issues. Many times, an apparent issue will lead the appraiser to require an inspection by a qualified, licensed professional who has the training to make a determination about anything that looks questionable. For example, an appraiser might notice that a roof looks to be near the end of its physical life, but is not qualified to make that determination, so will require a roof inspection by the appropriate professional.

These are a few of the major considerations to be aware of when it comes to an FHA appraisal. Keep these things in mind and you are likely to have a better experience and fewer hang-ups when you need an appraisal for an FHA mortgage.

You can find more information about getting an FHA mortgage at https://www.hud.gov/buying/loans