Albro & Associates has answers to "Frequently Asked Questions"

Albro & Associates is willing to elaborate on any questions you might have about appraisals in Somervell County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would someone need your services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the appraisal has been completed, what guarantee is there that the value indicated is veritable?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Somervell County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Return to top)

An appraisal report is an estimation that concludes with an opinion of value. This opinion or estimate is discerned through the use of a formal method that commonly uses three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves concluding what the improvements would cost without physical degradation, adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for 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 money produced by the property.

Describe what an appraiser does   (Return to top)

An appraiser provides a fair and credible assessment of market value, often in the context of a real estate exchange. Appraisers illustate their expert conclusions in appraisal reports.


Why would someone need your services?   (Return to top)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
  • If you are applying for a loan.
  • To reduce your tax burden.
  • To build a case for a homeowner's equity and remove PMI.
  • To challenge improperly assessed property taxes.
  • If you need to settle an estate.
  • To provide you an edge when purchasing a home.
  • To find the most probable property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every home.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
For a more detailed explanation of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Return to top)

Appraisers do not do provide residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the house from bottom to attic. Generally, a home inspection report will explain the amenities and the necessities of the house: 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be honest, they have nothing in common. The CMA depends on indistinct local market trends. The appraisal relies on similar valid comparable sales. Area and building values are also precedent in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Texas licensed professional who made their livelihood on valuing homes in and around Somervell County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report?   (Return to top)

Each report should demonstrate a believable value opinion and must identify the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The reason for the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the value opinion.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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.
  • The scope of work considered while working up the assignment.
For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, what guarantee is there that the value indicated is veritable?   (Return to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis utilized in the appraisal was proper.

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

  • That appraisal services were not rendered in a careless or negligent manner.

  • That a believable, supportable appraisal report was conferred.
To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be logged - all with the end goal of being able to render unbiased value opinions. In addition, appraisers must stick to a meticulous industry code of ethics and comply with 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).


    (Return to top) Licensing and certification takes coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Return to top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Somervell County or other areas?   (Return to top)

One of the primary things an appraiser does is to compile data. Data can be described as either Specific or General. Specific data is taken 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 many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

What can a full appraisal do for me?   (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. 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. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

What exactly is PMI and how can I get rid of it?   (Return to top)

PMI is short for for Private Mortgage Insurance. This additional policy takes care of the lender if a borrower defaults on the loan and the market price of the house 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 mortgage payment have a lineitem for PMI?Call Albro & Associates today at 817-561-0011 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?   (Return to top)

The first step in most appraisals is the home 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, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

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.
  • 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 covenants or fees .
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"?   (Return to top)

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."

Who actually owns the appraisal report?   (Return to top)

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 entitled to a copy of the appraisal - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, 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.

Are some home improvements more worthwhile than others?   (Return to top)

The added value of a particular amenity truly depends on the local market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.