Temple Realty has answers to "Frequently Asked Questions"


	Temple Realty is always eager to talk to you about any concerns you might have about appraisals or real estate in Lubbock and Lubbock County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
Why would someone require services from Temple Realty?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the report has been completed, how can I have a guarantee that the value indicated is legitimate?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Lubbock County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (See list of FAQ's)

The method of producing an appraisal consists of an inspection which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or valuation. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves concluding what the improvements would cost less physical depreciation, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (See list of FAQ's)

An appraiser provides a fair and credible opinion of market value, in the support of real property transactions. Appraisers exhibit their professional findings in appraisal reports.

Why would someone require services from Temple Realty? (See list of FAQ's)

There are a lot of reasons to obtain an appraisal from Temple Realty with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal report include:

If you are applying for a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To deal with an estate.
To offer you a leg-up when purchasing real estate.
To figure out an honest 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.
Because an official agency such as the IRS requires it.
If you ever find yourself in a civil case.

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

How is an appraiser different than a home inspector? (See list of FAQ's)

Appraisers do not do perform home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the home from basement to rooftop. The usual house inspector's report will include an evaluation of the condition of the property's heating systems, 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)

To be blunt, it's like comparing sugar and saccharin. The CMA relies on vague local market trends. The appraisal is based on similar proven comparable sales. The appraisal report will also contain neighborhood and construction values. 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 largest differentiator is the person doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, state licensed professional who bases a career on valuing homes in and around Lubbock County creates the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report? (See list of FAQ's)

Every appraisal should reflect a credible value opinion and should clearly state the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value reported and a definition of that value.
The effective date of the appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
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 considered when completing the assignment.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, how can I have a guarantee that the value indicated is legitimate? (See list of FAQ's)

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

The appraisal contained 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 conducted in a careless or negligent fashion.

The final appraisal report was clear, legitimate and not easily discredited.

There are intense education and on the job experience requirements that must be fulfilled in order to get an appraisal license in Texas. In addition, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/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 engages the services of appraisers? (See list of FAQ's)

Commonly, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Lubbock County or other areas? (See list of FAQ's)

One of the most important activities of an appraiser is to collect data. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a numerous places. To research recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

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? (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 determine 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, you can avoid overpaying by commissioning 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. Don't make decisions in the dark with a professional appraisal.

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

PMI is short for for Private Mortgage Insurance. This supplemental plan covers the lender in the event a borrower defaults on the loan and the market price of the property 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.


	Does your monthly mortgage payment include a fee for PMI?Call Temple Realty today at (806) 765-8999 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal inspection (See list of FAQ's)

The first step in most appraisals is the home 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 features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

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

A plot plan or survey of the house and land (if available).
Title policy that lists 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 "proposed" improvements when the property is being appraised "as complete".

What is "Market Value?" (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 entitled to a copy of the report - 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated 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? (See list of FAQ's)

The answer to this is different depending upon the location of the home. 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

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, yielding 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.