Fitzgerald Appraisals has answers to "Frequently Asked Questions"

Fitzgerald Appraisals is always willing to elaborate on any questions you might have about appraisals in Bexar County. Contact us today to talk about how we can help you with your valuation problems.

Describe an appraisal
Describe what an appraiser does
What would cause me to require a real estate appraisal?
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?
Upon completion of the appraisal, what assurance is there that the value indicated is veritable?
How are appraisers certified?
Who employs appraisers?
Where does Fitzgerald Appraisals get the data used to estimate values in Bexar County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (List of questions)

An appraisal is an inspection allowing the appraiser to come to an opinion of value. The real estate appraiser will typically 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, less physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which deals with finding a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a home. The Income Approach is primarily used for figuring out 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.

Describe what an appraiser does   (List of questions)

An appraiser forumlates a fair and credible assessment of market value, in the support of real property transactions. Appraisers exhibit their investigation in appraisal reports.


What would cause me to require a real estate appraisal?   (List of questions)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:
  • If you are applying for a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest high property taxes.
  • To handle an estate.
  • To provide you an edge when purchasing a home.
  • To find a reasonable sales price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every property.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more extensive explanation of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (List of questions)

Appraisers do not do complete home inspections and are not home inspectors. A third-party home inspector will inspect the structure of the house, from the top to the bottom. Commonly, a home inspection report will discuss the amenities and the necessities of the home: 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, visible 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?   (List of questions)

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 verified by public record. The appraisal report will also contain neighborhood and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person doing the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who made their livelihood on valuing homes in and around Bexar County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

What are the contents of an appraisal report?   (List of questions)

The main purpose 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.
  • 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 appraiser's opinions and conclusions.
  • Pertinent property characteristics, including: location, physical attributes, legal attributes, economic attributes, the real property interest 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 items.
  • All 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 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 appraisal, what assurance is there that the value indicated is veritable?   (List of questions)

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

  • That crucial errors of omission or commission were not committed individually or collectively.

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

  • That a credible, substantiated appraisal report was conferred.
There are rigorous education and experience requirements that must be adhered to in order to become a licensed appraiser in Texas. Likewise, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification takes coursework, tests and real world experience. Once licensed, he or she is required to complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers?   (List of questions)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Fitzgerald Appraisals get the data used to estimate values in Bexar County or other areas?   (List of questions)

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

General data is collected from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other public documents verify 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 last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.


How can a licensed appraiser help me?   (List of questions)

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 a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. 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. Knowing its true value means you can make smart financial decisions.


What exactly is PMI and how can I get rid of it?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. It takes care of 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. 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 Fitzgerald Appraisals today at 210-347-0143. You may be able to save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment   (List of questions)

We start with an inspection of the property. During this process, the appraiser 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. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • List of personal property to be sold with the building.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean?   (List of questions)

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?   (List of questions)

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 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 engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may state how the appraisal can be used; 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.


How can I get the most ROI out of home improvements?   (List of questions)

The added value of a particular amenity truly depends on the local market. 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. 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 are right up there with kitchens, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.