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Stovall & Associates has answers to "Frequently Asked Questions"

Stovall & Associates is more than happy to talk to you about any concerns you might have about appraisals in Austin and Travis County. Contact us today to talk about how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone require services from Stovall & Associates?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the appraisal has been completed, how can I have a guarantee that the value conclusion is accurate?
What goes into an appraiser's certification?
Who hires Stovall & Associates
Where does Stovall & Associates get the data used to estimate values in Travis County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Back to top)

An appraiser performs an evaluation that leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves discerning what the improvements would cost less physical depreciation, plus the land value. The Sales Comparison Approach deals with searching for similar properties in the vicinity and finding value based on comparing those properties to the home in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do?   (Back to top)

An appraiser forumlates a professional, unbiased opinion of market value, in the support of real property exchanges. Appraisers reveal the details of their professional analysis in appraisal reports.


Why would someone require services from Stovall & Associates?   (Back to top)

There are a lot of reasons to purchase an appraisal from Stovall & Associates with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To contest high property taxes.
  • To handle an estate.
  • To give you an edge when purchasing real estate.
  • To figure out a reasonable price when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every property.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
For a more detailed explanation of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (Back to top)

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. The purpose of a home inspection is to investigate the structure of the house from basement to top. For the most part, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Back to top)

To be honest, they have nothing in common. What the CMA depends on are superficial trends. The appraisal is based on similar verifiable comparable sales. Also, the appraisal checks other factors like condition, neighborhood and replacement 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.

The person behind the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report?   (Back to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
  • The client and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work used to complete 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 completed, how can I have a guarantee that the value conclusion is accurate?   (Back to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained analysis of the data.

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

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

  • The final appraisal report was understandable, legitimate and not easily discredited.
There are rigorous classroom and experience requirements that must be fulfilled in order to get an appraisal license in Texas. In addition, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Stovall & Associates   (Back to top)

Typically, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Stovall & Associates get the data used to estimate values in Travis County or other areas?   (Back to top)

One of the primary tasks an appraiser must accomplish is to collect data. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a variety of sources. To find out about recent sales to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet 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 houses in the same market.


What can a full appraisal do for me?   (Back to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. This additional policy protects the lender if a borrower is unable to pay on the loan and the market price of the property is less than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Does your monthly mortgage payment have a lineitem for PMI?Call Stovall & Associates today at 512-300-7958 or send us an e-mail. Documentation of your home's present value could save you thousands.

Do you need anything from me in advance?   (Back to 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 amenities. 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 . Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to appliances 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 readily available).
  • Title policy that describes encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?"   (Back to 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?   (Back to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 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 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.


Are some home improvements more worthwhile than others?   (Back to top)

The answer to this is different depending upon the location of the home. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 were second, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.

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