Chaparral Real Estate Appraisals has answers to "Frequently Asked Questions"

Chaparral Real Estate Appraisals is always more than happy to talk to you about any concerns you might have about appraisals or real estate in Dallas County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to request your services?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Once the appraisal has been delivered, what guarantee is there that the value conclusion is accurate?
How difficult is it to become certified?
Who hires Chaparral Real Estate Appraisals
Where does Chaparral Real Estate Appraisals get the information used to estimate values in Dallas County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (See list of FAQ's)

An appraiser performs an estimation that produces an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves concluding what the improvements would cost less physical depreciation, adding the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns concluding a comparison to similar houses nearby. The Sales Comparison Approach is normally the most definitive and best indicator of value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the market value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does   (See list of FAQ's)

An appraiser provides a professional, unbiased assessment of market value, often in the context of a real estate exchange. Appraisers exhibit their expert investigation in appraisal reports.


What would cause me to request your services?   (See list of FAQ's)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest inflated property taxes.
  • To handle an estate.
  • To provide you a negotiating tool when purchasing a home.
  • To figure out a likely property value when selling real estate.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will help.
If you need more information about the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (See list of FAQ's)

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the house from foundation to attic. The stereotypical house inspector's report will include an evaluation of the integrity of the home'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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (See list of FAQ's)

Frankly, it's like comparing broadband and dial-up. The CMA depends on indefinite local market trends. The appraisal relies on similar proven comparable sales. Also, the appraisal checks other factors like condition, neighborhood and construction costs. 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 biggest difference is the person creating 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 has formed their livelihood on valuing properties in and around Dallas County creates the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the price of the home.

What does the appraisal report contain?   (See list of FAQ's)

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, one will customarily 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.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.(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 description, 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 items.
  • 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 used while working up the assignment.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been delivered, what guarantee is there that the value conclusion is accurate?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained an apropos analysis of the information.

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

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

  • That a trustworthy, supportable appraisal report was conferred.
There are rigorous classroom and on the job experience requirements that must be adhered to in order to achieve the title of "licensed appraiser" in Texas. Likewise, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (See list of FAQ's) Licensing and certification requires coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she must then engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who hires Chaparral Real Estate Appraisals   (See list of FAQ's)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Chaparral Real Estate Appraisals get the information used to estimate values in Dallas County or other areas?   (See list of FAQ's)

One of the primary activities of an appraiser is to gather data. Data can be split into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a numerous sources. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Appraisers often have 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 service.

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


How can a licensed appraiser help me?   (See list of FAQ's)

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. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Chaparral Real Estate Appraisals is the best way to ensure assets are divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.


What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI stands for Private Mortgage Insurance. It protects the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than the balance of 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 house payment have a lineitem for PMI?Call Chaparral Real Estate Appraisals today at 469-964-1728 or send us an e-mail. Documentation of your home's present value could save you thousands.

Does the appraiser need anything from me in advance?   (See list of FAQ's)

The first step in most appraisals is the property inspection. 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 condition of its amenities. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A survey or plot map of the property and building (if readily available).
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • A list of "suggested" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (See list of FAQ's)

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?   (See list of FAQ's)

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 report - 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.

The exception to this rule is when a home owner engages an appraiser directly. In these scenarios, the appraiser may state 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.


Which home renovations add the most to the price?   (See list of FAQ's)

The added value of a particular amenity truly depends on the local market. 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. 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, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.