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Bonded Real Estate Appraisal Service, LLC has answers to "Frequently Asked Questions"

Bonded Real Estate Appraisal Service, LLC is always eager to answer any questions you might have about appraisals in El Paso County. Contact us today to learn how we can help solve your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
Why would a person need a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the assignment has been delivered, how can I have a guarantee that the value indicated is trustworthy?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in El Paso 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?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Top)

The appraisal process is an estimation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which deals with discovering a comparison to other similar nearby properties which have recently sold. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to determine the market value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (Top)

An appraiser offers an objective and well supported opinion of market value, often in the context of a real estate sale. Appraisers document their conclusions in appraisal reports.


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

There are a lot of reasons to order an appraisal from Bonded Real Estate Appraisal Service, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
  • To get a loan.
  • If you would like to lower your property tax obligations.
  • To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • To settle an estate.
  • To offer you a negotiating tool when purchasing a home.
  • To figure out the most probable price 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.
  • Government agencies such as the IRS need an appraisal on every home.
  • If you are ever involved in a lawsuit.
For a more extensive description of the appraisal process click here.


How is an appraiser different than a home inspector?   (Top)

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. A third-party home inspector will inspect the structure of the home, from the roof to the foundation. Commonly, a home inspection report will discuss 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 capacity of the home such as the attic, exposed 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?   (Top)

To be blunt, it's like comparing sugar and saccharin. The CMA utilizes market trends to create most of their business. An appraisal utilizes comparable sales that can be proven by public record. Also, the appraisal checks other factors like condition, area and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The person creating the report is frankly the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Texas licensed professional who bases a career on valuing homes in and around El Paso County is behind the appraisal. Moreover, the appraiser is an independent party, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

What's in an appraisal report?   (Top)

Each appraisal should reflect a believable value opinion and will identify the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, 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 considerations.
  • 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 used when completing the appraisal.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report


Once the assignment has been delivered, how can I have a guarantee that the value indicated is trustworthy?   (Top)

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

  • Whether individually or collectively, there were no major errors contained in the appraisal, nor any relevant details left out.

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

  • The final appraisal report was easy to explain, credible and conclusive.
There are intense education and experience requirements that must be adhered to in order to achieve the designation of "licensed appraiser" in Texas. In addition, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Top)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure property 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 an appraiser get the data used to estimate values in El Paso County or other areas?   (Top)

One of the primary things an appraiser does is to compile data. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals 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. For those selling a home, you'll want to figure out the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Bonded Real Estate Appraisal Service, LLC is the best documentation to ensure assets are split up fairly. Simply put, a home 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?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender in case a borrower defaults on the loan and the value of the home is less 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 loan payment include a fee for PMI?Call Bonded Real Estate Appraisal Service, LLC today at (915) 833-7337 or send us an e-mail. A current appraisal could save you thousands.

Does the appraiser need anything from the homeowner in advance?   (Top)

We start with an inspection of the home. 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 (gates aren't locked, etc). Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A survey or plot map of the property and building (if available).
  • List of personal property to be sold with the building.
  • Title policy that lists encroachments or easements.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation 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?"   (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."



Does the appraisal belong to the bank or the consumer?   (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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (Top)

This really depends on where the home is. 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 weren't far behind, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.