Southmost Realty, Appraisals & Court Expert Witness has answers to "Frequently Asked Questions"

Southmost Realty, Appraisals & Court Expert Witness is always prepared to elaborate on any concerns you might have about appraisals in Harlingen and Cameron County. Contact Southmost Realty, Appraisals & Court Expert Witness today to learn how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request services from Southmost Realty, Appraisals & Court Expert Witness?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the report has been delivered, what assurance is there that the value conclusion is veritable?
What does it mean for an appraiser to be licensed?
Who hires Southmost Realty, Appraisals & Court Expert Witness
Where does Southmost Realty, Appraisals & Court Expert Witness get the data used to estimate values in Cameron County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (List of questions)

An appraisal is an investigation leading to an opinion of value. This opinion or estimate is figured using a formal method that usually uses the three main "common approaches to value". One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to comparable houses close by. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a house. 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 produce.

What does an appraiser do?   (List of questions)

An appraiser offers an unbiased and well justified assessment of market value, in the support of real estate transactions. Appraisers summarize their professional analysis in appraisal reports.


What would cause me to request services from Southmost Realty, Appraisals & Court Expert Witness?   (List of questions)

There are a lot of reasons to purchase an appraisal from Southmost Realty, Appraisals & Court Expert Witness with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:
  • To get a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
  • To challenge high property taxes.
  • If you need to settle an estate.
  • To offer you a negotiating tool when purchasing a home.
  • To determine a reasonable property value 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 house.
  • If you ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


Is an appraisal the same as a home inspection?   (List of questions)

Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the property, from the top to the bottom. Generally, a home inspection report will evaluate 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, accessible 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)

To be blunt, it's like comparing sugar and saccharin. The CMA utilizes market trends to generate most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also include neighborhood and construction costs. A CMA delivers a "ball park 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 behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Texas licensed professional who made their livelihood on valuing real estate in and around Cameron County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (List of questions)

The main point of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical description, legal attributes, economic factors, 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 when 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 has been delivered, what assurance is there that the value conclusion 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:
  • That the information analysis utilized in the appraisal was suitable.

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

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

  • That a credible, defensible appraisal report was communicated.
There are intense education and experience requirements that must be fulfilled in order to get an appraisal license in Texas. Likewise, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification requires classroom study, tests and experience working under a supervisor. Once licensed, he/she must then take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who hires Southmost Realty, Appraisals & Court Expert Witness   (List of questions)

Typically, appraisers are hired by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Southmost Realty, Appraisals & Court Expert Witness get the data used to estimate values in Cameron County or other areas?   (List of questions)

One of the main tasks an appraiser performs is to assimilate property data. Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is collected from a numerous sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely 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 product.

And most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.


Why should I hire a licensed appraiser?   (List of questions)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want an appraisal. 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. For people settling an estate or divorce, an appraisal from Southmost Realty, Appraisals & Court Expert Witness is the best documentation to ensure assets are split up fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is an acronym for Private Mortgage Insurance. This added plan takes care of the lender if a borrower is unable to pay on the loan and the value of the house 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.

Does your monthly mortgage payment have a lineitem for PMI?Call Southmost Realty, Appraisals & Court Expert Witness today at (956) 412-1357 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?   (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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would make it difficult to measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A survey or plot map of the property and building (if readily available).
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

How does an appraiser define "Market Value"?   (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 has rights to the appraisal report?   (List of questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. 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 noted otherwise, the home owner can do whatever they want with the appraisal.


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

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 as long as your home doesn't then become atypical for your neighborhood in terms of size.