Hudgins-Groover Real Estate and Appraisal has answers to "Frequently Asked Questions"


	Hudgins-Groover Real Estate and Appraisal is ready to reply to any questions you might have about appraisals in Wharton and Wharton County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would require a real estate appraisal?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Upon completion of the report, how can I have certainty that the value indicated is accurate?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Wharton 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?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (List of questions)

An appraisal is an estimation that concludes with an opinion of value. The appraiser must use a few "approaches," typically three, to arrive at the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the home, minus depreciation and physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.

Describe what an appraiser does (List of questions)

An appraiser produces a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers demonstrate their professional findings in appraisal reports.

What are the reasons a person would require a real estate appraisal? (List of questions)

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

If you are applying for a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To fight inflated property taxes.
If you need to take care of an estate.
To offer you a leg-up when purchasing a home.
To find an honest property value when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

Click here for a more detailed explanation of the process dealing with getting an appraisal.

How is an appraisal different than a home inspection? (List of questions)

Appraisers do not do provide home inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the property, from the top to the bottom. For the most part, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible 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? (List of questions)

Simply put, it's apples and oranges. The CMA relies on vague local market trends. The appraisal is based on similar definite comparable sales. Location and building values are also precedent in an appraisal. All a CMA does is generate a "ball park 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 who's behind the report. 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 has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no conditional interest in the property's value, unlike the agent, whose income is tied to the price of the home.

What's in an appraisal report? (List of questions)

Every appraisal should demonstrate a supported value opinion and must clearly state the following:

Who engaged the appraiser and other intended users.
The intended use of the report.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
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, items that are more or less permanently installed 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.
The scope of work considered while working up the job.

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

Upon completion of the report, how can I have certainty that the value indicated is accurate? (List of questions)

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

The appraisal contained an apropos analysis of the information.

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

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

That a trustworthy, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged - all with the end goal of being able to render unbiased value opinions. Likewise, appraisers must follow a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires classroom study, tests and real world experience. Once an appraiser is licensed, he/she must then complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Commonly, appraisers are hired by lenders to render a value opinion on property involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

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

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

General data is received from a number of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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

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

An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. If you're selling your home, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Hudgins-Groover Real Estate and Appraisal 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? (List of questions)

PMI stands for Private Mortgage Insurance. This additional policy protects the lender if a borrower is unable to pay on the loan and the value of the house is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	Did you have less than 20% to put down on your mortgage? Call Hudgins-Groover Real Estate and Appraisal today at 9795320007. You may be able to get rid of your Private Mortgage Insurance payment.

Do you need anything from the homeowner in advance? (List of questions)

We begin with an inspection of the property. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items 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 readily available).
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.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning 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? (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)

For mortgage transactions, the lender requests 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 report - 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 hires an appraiser directly. In these situations, the appraiser may state the purpose of the appraisal; 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the best ROI 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, something that may not increase your value would be painting just for the sake of redecorating.