Appraiser has answers to "Frequently Asked Questions"

Appraiser is always willing to handle any questions you might have about appraisals in San Angelo and Tom Green County. Contact Appraiser today to see how we can help you with your valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would I need a real estate 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?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does Appraiser get the information used to estimate values in Tom Green County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Go to list of  questions)

The process of producing an appraisal report deals with an evaluation which leads to an opinion of value. The appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves finding what the improvements would cost without physical deterioration, adding the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns making a comparison to similar homes nearby. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to figure the market value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (Go to list of  questions)

An appraiser offers an unbiased and well substantiated assessment of market value, often in the context of a real estate purchase. Appraisers exhibit their analysis in appraisal reports.


Why would I need a real estate appraisal?   (Go to list of  questions)

There are many reasons to obtain an appraisal from Appraiser with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
  • To receive a loan.
  • If you would like to lower your property tax obligations.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight improperly assessed property taxes.
  • If you need to take care of an estate.
  • To offer you a leg-up when purchasing a home.
  • To figure out an honest price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process about getting an appraisal.


How is an appraiser different than a home inspector?   (Go to list of  questions)

The appraiser is not a home inspector and does not do a comprehensive home inspection. A third-party home inspector will evaluate the structure of the house, from the top to the foundation. Usually, a home inspection report will discuss the amenities and the requirements of the house: 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, accessible 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)?   (Go to list of  questions)

Simply put, it's like comparing broadband and dial-up. The CMA relies on indefinite market trends. The appraisal depends on similar definite comparable sales. In addition, the appraisal verifies other factors like condition, location and construction prices. 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 most significant factor is the person behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their outcome.

What's in an appraisal report?   (Go to list of  questions)

Each report should reflect a believable value opinion and should identify the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • Any 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.
  • What was involved in the activity of completing the appraisal.
For a more in depth 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?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal contained analysis of the data.

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

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

  • The final appraisal report was easy to explain, sound and defensible.
To become a state licensed appraiser, we must satisfy intense education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Go to list of  questions)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Appraiser get the information used to estimate values in Tom Green County or other areas?   (Go to list of  questions)

Gathering information is one of the main tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a numerous places. To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.


What can a full appraisal do for me?   (Go to list of  questions)

An appraisal is a valuable tool whenever your home's value is relevant to a financial decision. For those selling a home, you'll want to figure out 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. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, 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?   (Go to list of  questions)

PMI stands for Private Mortgage Insurance. This added plan takes care of the lender if a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly mortgage payment have a lineitem for PMI?Call Appraiser today at 3259449327 or send us an e-mail. Documentation of your home's present value could save you thousands.

How do I get ready for the appraiser?   (Go to list of  questions)

We begin with an inspection of the home. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser 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 information on the purchase of the property for the last three years.
  • Title policy that lists encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (Go to list of  questions)

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."



Once complete, who actually owns the appraisal report?   (Go to list of  questions)

For mortgage transactions, the lender requests 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 bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate the purpose of the appraisal; 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.


Are some home improvements more worthwhile than others?   (Go to list of  questions)

The answer to this is different depending upon the location of the home. 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%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.