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4Appraisals LLC has answers to "Frequently Asked Questions"

4Appraisals LLC is always more than happy to handle any concerns you might have about appraisals or real estate in Ector County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
What are the reasons someone would request a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, what guarantee is there that the value conclusion is trustworthy?
What does it mean for an appraiser to be licensed?
Who hires Hallmark Appraisals
Where does an appraiser get the information used to estimate values in Ector County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



Describe an appraisal   (See list of FAQ's)

The appraisal process is an evaluation that leads to an opinion of value. The real estate appraiser must use a few "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, less the depreciation and physical deterioration, plus the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which involves concluding a comparison to comparable houses close by. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does   (See list of FAQ's)

An appraiser provides a professional, unbiased determination of market value, in the support of real estate exchanges. Appraisers present their professional conclusions in appraisal reports.


What are the reasons someone would request a real estate appraisal?   (See list of FAQ's)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:
  • If you are applying for a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To contest inflated property taxes.
  • To handle an estate.
  • To offer you a negotiating tool when purchasing real estate.
  • To figure out an honest sales price when putting your home on the market.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a lawsuit.
Click here for a more extensive explanation of the process involved in getting an appraisal.


How is an appraiser different than a home inspector?   (See list of FAQ's)

The appraiser is not a home inspector and does not do a comprehensive home inspection. An inspection is a third-party evaluation of the available structure and electrical and mechanical systems of a home, from the top to the bottom. Usually, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, 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 visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (See list of FAQ's)

Simply, they share nothing in common. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are valid resources. Location and construction costs are also precedent in an appraisal. The CMA will provide a non-specific 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. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed their livelihood on valuing real estate in and around Ector County is behind the appraisal. Moreover, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report?   (See list of FAQ's)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • The client and other intended users.
  • The intended use of the appraisal.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Relevant property characteristics, including: location, physical description, legal attributes, economic attributes, 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 items.
  • 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.
  • What was included in the activity of completing the assignment.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what guarantee is there that the value conclusion is trustworthy?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal used a suitable analysis of the information.

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

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

  • That a solid, substantiated appraisal report was communicated.
To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged. 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 carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (See list of FAQ's) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he or she is required to engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who hires Hallmark Appraisals   (See list of FAQ's)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Ector County or other areas?   (See list of FAQ's)

One of the most important tasks an appraiser performs is to collect property data. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is gathered from a variety of sources. To look up recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely need 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 service.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.


How can a licensed appraiser help me?   (See list of FAQ's)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to figure out the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; 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. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.


What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. This additional policy guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower 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 cancelling your PMI will make up for the price of the appraisal in a matter of months. Hallmark Appraisals is in the business of tracking value trends in Odessa and Ector County. Contact us today.

Should I do anything in advance of the appraisal appointment   (See list of FAQ's)

The first step in most appraisals is the home inspection. 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 status of its amenities. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if available).
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?"   (See list of FAQ's)

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."



Who has rights to the appraisal report?   (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (See list of FAQ's)

The answer to this is different depending upon the location of the home. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 were second, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.