Cheryl Clark Appraisals has answers to "Frequently Asked Questions"

Cheryl Clark Appraisals is ready to answer any concerns you might have about appraisals or real estate in Eastland County. Contact Cheryl Clark Appraisals today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would someone require a real estate appraisal?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, how can I have a guarantee that the final number is legitimate?
How are appraisers certified?
Who engages the services of appraisers?
Where does Cheryl Clark Appraisals get the data used to estimate values in Eastland County or other areas?
Why do I need a professional appraisal?
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?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (Top)

The method of writing an appraisal consists of an evaluation which leads to an opinion of value. This opinion or estimate is found by a formal method that commonly utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the house, minus age and physical dilapidation, adding the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns making a comparison to similar properties 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 would bring in.

What does an appraiser do?   (Top)

An appraiser offers a professional, unbiased opinion of market value, often in the context of a real estate exchange. Appraisers exhibit their professional conclusions in appraisal reports.


Why would someone require a real estate appraisal?   (Top)

There are a lot of reasons to obtain an appraisal from Cheryl Clark Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To contest inflated property taxes.
  • If you need to settle an estate.
  • To give you an edge when purchasing a home.
  • To determine the most probable price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a civil case.
If you need more information regarding the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Top)

Appraisers do not do provide residential property inspections and are not home inspectors. A third-party home inspector will judge the structure of the house, from the top to the foundation. For the most part, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Frankly, it's like comparing sugar and saccharin. What the CMA relies upon are superficial trends. The appraisal relies on specific proven comparable sales. The appraisal report will also contain area and construction values. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their value conclusion.

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

The main purpose of an appraisal report 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.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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.
  • What was included in the activity of completing the appraisal.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have a guarantee that the final number is legitimate?   (Top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis utilized in the appraisal was suitable.

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

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

  • The final appraisal report was understandable, credible and conclusive.
To become a state licensed appraiser, we must meet intense education and experience requirements that train us to produce an unbiased opinion. Plus, appraisers must obey 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification takes coursework, tests and real world experience. Once licensed, he or she must then 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?   (Top)

Mortgage lenders are an appraiser's typical client, using their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Cheryl Clark Appraisals get the data used to estimate values in Eastland County or other areas?   (Top)

One of the main tasks an appraiser engages in is to assimilate data. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is gathered from a numerous sources. To research recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

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

Why do I need a professional appraisal?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your house, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by getting 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.

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

PMI stands for Private Mortgage Insurance. This added plan guards the lender in case a borrower doesn't pay on the loan and the value of the house is less than what the borrower still owes on 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 amount you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Cheryl Clark Appraisals is in the business of tracking real estate value trends in Eastland and Eastland County. Contact us today.

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

We start with an inspection of the property. During this process, the appraiser 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can get to appliances like furnaces and water heaters.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (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."

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

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages 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 noted otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating?   (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

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, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.