Courtright & Associates, Inc. has answers to "Frequently Asked Questions"


	Courtright & Associates, Inc. is eager to handle any concerns you might have about appraisals in El Paso and El Paso County. Contact Courtright & Associates, Inc. today to talk about how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would a person need a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the report has been completed, what assurance is there that the final number is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in El Paso County or other areas?
Why should I hire a licensed appraiser?
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 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?

What is an appraisal? (Top)

The procedure of performing an appraisal report consists of an estimation which leads to an opinion of value. The real estate appraiser will use a several "approaches," typically three, to draw up the estimation of market value. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns figuring a comparison to similar properties nearby. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a home. The third approach is the Income Approach, which is the most important method 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 (Top)

An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers reveal the details of their professional analysis in appraisal reports.

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

There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:

To get a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove PMI.
To contest improperly assessed property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing real estate.
To find a likely property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you ever find yourself in a civil case.

For a more detailed explanation of the appraisal process click here.

Is an appraisal the same as a home inspection? (Top)

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

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

Simply put, it's like comparing opera to country. What the CMA relies upon are ill-defined trends. An appraisal utilizes comparable sales that can be proven by public record. Location and construction prices are also precedent in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is actually the biggest 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. A certified, Texas licensed professional who made a career on valuing properties in and around El Paso County creates the appraisal. Further, the appraiser is an independent voice, with no vested interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.

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

Every appraisal must indicate a supported estimate of value and will clearly state the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value reported and a definition of that value.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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.
What was included in the process of completing the job.

For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, what assurance is there that the final number is accurate? (Top)

In the documentation of an appraisal, 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 relevant details left out.

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

The final appraisal report was understandable, legitimate and conclusive.

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that enable us to formulate an unbiased opinion. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification requires coursework, tests and real world experience. Once licensed, he/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 do appraisers work for? (Top)

Typically, appraisers are employed by lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Collecting data is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is received from a many sources. To research recently sold homes to be used as "comps", an appraiser will often use 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 most importantly, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why should I hire a licensed appraiser? (Top)

An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. When selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Courtright & Associates, Inc. is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Top)

PMI stands for Private Mortgage Insurance. This supplemental plan guards the lender in case a borrower defaults on the loan and the market price of the home is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you secure your mortgage with less than 20% down? Call Courtright & Associates, Inc. today at (915) 877-5141 to see if you can cancel your Private Mortgage Insurance premium.

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

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

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
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).
Most recent real estate tax bill from El Paso and or 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)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 bundled with all the other closing documents - but is not entitled 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 situations, the appraiser may stipulate 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.

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

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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, something that may not increase your value would be painting just for the sake of redecorating.