Lone Star Appraisals has answers to "Frequently Asked Questions"

Lone Star Appraisals is willing to address any questions you might have about appraisals in Navarro County. Contact us today to talk about how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would require your services?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the report is done, how can I have a guarantee that the value conclusion is trustworthy?
What are the requirements to be a certified appraiser?
Who hires Lone Star Appraisals
Where does Lone Star Appraisals get the information used to estimate values in Navarro County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (List of questions)

An appraiser performs an evaluation that generates an opinion of value. The real estate appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, minus age and physical dilapidation, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most definitive and best indicator of a liklely sales price for a residence. 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 money produced by the property.

What does an appraiser do?   (List of questions)

An appraiser generates a fair and credible determination of market value, in the support of real property transactions. Appraisers illustate their professional findings in appraisal reports.


What are the reasons a person would require your services?   (List of questions)

There are a lot of reasons to purchase an appraisal from Lone Star Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:
  • If you are applying for 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 inflated property taxes.
  • To settle an estate.
  • To give you an edge when purchasing a home.
  • To figure out the most probable sales price when selling real estate.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS require an appraisal on every home.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


How is an appraisal different than a home inspection?   (List of questions)

Home inspectors do not produce an opinion of value and do not do appraisal reports. The purpose of a home inspection is to investigate the structure of the home from basement to attic. The standard home inspector's report will contain an evaluation of the condition of the home'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.

Is an appraisal the same as a comparative market analysis(CMA)?   (List of questions)

To be honest, they have nothing in common. What the CMA depends on are superficial trends. Appraisals use similar sales which are valid resources. The appraisal report will also contain area and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person creating the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Texas licensed professional who has formed a career on valuing real estate in and around Navarro County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their outcome.

What does the appraisal report contain?   (List of questions)

Every report must demonstrate a believable value opinion and must clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The reason for the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
  • 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.
  • What was involved in the process of completing the appraisal.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have a guarantee that the value conclusion is trustworthy?   (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis contained in the appraisal was suitable.

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

  • That appraisal services were rendered in a careful and judicious manner.

  • That a credible, substantiated appraisal report was imparted.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that prepare us to produce an unbiased opinion. Plus, appraisers must follow a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he/she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Lone Star Appraisals   (List of questions)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Lone Star Appraisals get the information used to estimate values in Navarro County or other areas?   (List of questions)

Collecting data is one of the main tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is gathered from a many places. To find out about recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

Why do I need a professional appraisal?   (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. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Lone Star Appraisals is the best documentation to ensure assets are divided evenly. Simply put, a home 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?   (List of questions)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the value of the property is lower 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.

The money you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Lone Star Appraisals is a name you can trust when it comes to real estate value trends in Corsicana and Navarro County. Contact us today.

How do I get ready for the appraiser?   (List of questions)

The first step in most appraisals is the home 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • List of personal property to be sold with the home.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements if the property is to be appraised "as complete".

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."

Who actually owns the appraisal report?   (List of questions)

For mortgage transactions, the lender requests 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 appraisal - 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 hires an appraiser directly. In these scenarios, 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others?   (List of questions)

It really depends on the 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 add value would be painting just for the sake of redecorating.