Wallace Appraisal Service LLC has answers to "Frequently Asked Questions"


	Wallace Appraisal Service LLC is always prepared to talk to you about any questions you might have about appraisals or real estate in Odessa and Ector County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would I need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
After completing the report, what guarantee is there that the final number is trustworthy?
How difficult is it to become certified?
Who hires an appraiser?
Where does an appraiser get the information used to estimate values in Ector County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Top)

An appraiser provides an estimation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach involves finding comparable properties in close proximity and discerning value based on making a comparison of those prior sales to the house in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

Describe what an appraiser does (Top)

An appraiser forumlates a fair and credible assessment of market value, often in the context of a real estate exchange. Appraisers summarize their findings in appraisal reports.

Why would I need a real estate appraisal? (Top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:

If you are applying for a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight improperly assessed property taxes.
To handle an estate.
To offer you an edge when purchasing a home.
To figure out the most probable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

If you need a more detailed explanation of the appraisal process, please click here.

What is the difference between an appraisal and a home inspection? (Top)

Home inspectors do not figure out an opinion of value and do not do appraisal reports. An inspection is a third-party investigation of the livable structure and mechanical systems of a property, from the top to the bottom. The stereotypical property inspector's report will include an evaluation of the integrity of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

My agent performed a CMA for me. Is that the same as an appraisal? (Top)

Frankly, it's like comparing opera to country. What the CMA relies upon are ill-defined trends. Appraisals use comparable sales which are valid resources. Also, the appraisal checks other factors like condition, neighborhood and construction costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no conditional interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report? (Top)

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, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered while working up the appraisal.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what guarantee is there that the final number is trustworthy? (Top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an appropriate analysis of the data.

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

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

That a believable, defensible appraisal report was communicated.

To become a state licensed appraiser, we must meet extensive education and experience requirements that give us the background to formulate an unbiased opinion. Plus, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser? (Top)

Mortgage lenders are an appraiser's most likely client, needing 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 hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Ector County or other areas? (Top)

One of the primary tasks an appraiser engages in is to collect property data. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (Top)

An appraisal is a valuable tool whenever the value of your home is pertinent to some financial decision. For those selling a home, you'll want to figure out a 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. When buying, you can avoid overpaying by commissioning an independent appraisal. 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. Knowing its true value is essential to making informed financial decisions.

What exactly is PMI and how can I get rid of it? (Top)

PMI is short for for Private Mortgage Insurance. It protects the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Does your monthly house payment include a fee for PMI?Call Wallace Appraisal Service LLC today at 432-296-2043 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser? (Top)

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 features. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:

Any records on the purchase of the property for the last three years.
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A list of any major home improvements and upgrades, 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 bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (Top)

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."

Once complete, who actually owns the appraisal report? (Top)

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.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Top)

A home's location - what city it is in and even what part of that city - is key to this popular question. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms weren't far behind, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.