Driver & Associates Appraisal Services has answers to "Frequently Asked Questions"


	Driver & Associates Appraisal Services is willing to address any questions you might have about appraisals or real estate in Tarrant County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would I need your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, how can I have confidence that the value conclusion is trustworthy?
How are appraisers certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Tarrant County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (List of questions)

An appraisal is an investigation leading to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find the value of a property; it involves concluding what the improvements would cost without physical depreciation, plus the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable houses nearby. Being the most common approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a residence. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

Describe what an appraiser does (List of questions)

An appraiser forumlates a professional, unbiased assessment of market value, in the support of real property transactions. Appraisers show their professional findings in appraisal reports.

Why would I need your services? (List of questions)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To contest inflated property taxes.
If you need to settle an estate.
To give you a leg-up when purchasing a home.
To determine an honest property value when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government 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 of getting an appraisal.

How is an appraiser different than a home inspector? (List of questions)

Appraisers do not do provide home inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the property from basement to rooftop. For the most part, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

Honestly, they share nothing in common. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include neighborhood and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person doing the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

What can I expect to see in my appraisal report? (List of questions)

Each appraisal should indicate a credible value opinion and must clearly state the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
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 included in the activity of completing the assignment.

For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have confidence that the value conclusion is trustworthy? (List of questions)

In the documentation of an appraisal, each appraiser must make sure of the following:

The appraisal used a suitable analysis of the data.

Whether individually or collectively, there were no grave errors contained in the appraisal, nor any material details left out.

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

The final appraisal report was clear, sound and not easily discredited.

There are rigorous education and practical experience requirements that must be fulfilled in order to get an appraisal license in Texas. Plus, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires coursework, tests and experience working under a supervisor. Once licensed, he or she is required to take continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Mortgage lenders are an appraiser's typical client, requesting their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Tarrant County or other areas? (List of questions)

Collecting data is one of the primary tasks an appraiser engages in. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why do I need a professional appraisal? (List of questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal helps you set the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. 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. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)

PMI is short for for Private Mortgage Insurance. This added policy guards the lender in the event a borrower defaults on the loan and the value of the home is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The amount you keep from cancelling your PMI pays for the appraisal in no time. Driver & Associates Appraisal Services is a name you can trust when it comes to value trends in Forth Worth and Tarrant County. Contact us today.

Should I do anything in advance of the appraisal appointment (List of questions)

The first step in most appraisals is the property inspection. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, 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:

Records on the latest purchase of the property in the last three years.
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 central air conditioning or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"? (List of questions)

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 actually owns the appraisal report? (List of questions)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (List of questions)

Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.