Cookus Appraisals has answers to "Frequently Asked Questions"


	Cookus Appraisals is always prepared to address any concerns you might have about appraisals. Contact us today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons someone would request your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the assignment has been completed, how can I have certainty that the value conclusion is accurate?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does Cookus Appraisals get the data used to estimate values?
How can a licensed appraiser help 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 does "Market Value" mean?
Who has rights to 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)

An appraisal report is an evaluation allowing the appraiser to come to an opinion of value. This opinion or estimate is concluded by using a formal method that typically utilizes the three main "common approaches to value". One of them is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves finding comparable properties in the vicinity and discovering the value based on comparing those homes to the home being appraised. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a property. The Income Approach is mainly 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 produce.

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

An appraiser formulates an unbiased and well justified determination of market value, often in the context of a real estate exchange. Appraisers exhibit their professional findings in appraisal reports.

What are the reasons someone would request your services? (See list of FAQ's)

There are many reasons to order an appraisal from Cookus Appraisals with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:

If you are applying for a loan.
To reduce your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To contest inflated property taxes.
If you need to take care of an estate.
To offer you an edge when purchasing real estate.
To figure out an honest price when selling your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
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.

Is an appraisal the same as a home inspection? (See list of FAQ's)

Appraisers do not do complete home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the property from foundation to rooftop. The general property 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.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply, they share nothing in common. What the CMA relies upon are ill-defined trends. The appraisal depends on specific verifiable comparable sales. Also, the appraisal checks other factors like condition, neighborhood and replacement costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who has formed a career on valuing homes in and around DFW creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their outcome.

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

The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the appraisal.
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
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.
What was included in the activity 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 assignment has been completed, how can I have certainty that the value conclusion is accurate? (See list of FAQ's)

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

The appraisal used analysis of the information.

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

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

That a solid, supportable appraisal report was imparted.

To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged. Likewise, appraisers must stick to a stringent 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 insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification vary from state to state. However, licensing and certification typically translates to many hours of coursework, tests and practical experience. Once an appraiser is 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 engages the services of appraisers? (See list of FAQ's)

Most of the time, appraisers are called upon by mortgage lenders to render a value opinion on a house involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Cookus Appraisals get the data used to estimate values? (See list of FAQ's)

One of the primary activities of an appraiser is to gather data. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a variety of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, 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 doing assignments for other houses in the same market.

How can a licensed appraiser help me? (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. When selling your house, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Cookus Appraisals is the best way 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? (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. This supplementary policy protects the lender if a borrower doesn't pay on the loan and the value of the home 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.


	Did you secure your mortgage with less than 20% down? Call Cookus Appraisals today at 817-832-8475 to see if you can cancel your Private Mortgage Insurance premium.

Do you need anything from me in advance? (See list of FAQ's)

We start with an inspection of the property. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

Any records on the purchase of the property for the last three years.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (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 has rights to the appraisal report? (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 appraisal - 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 state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated 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)

Like all things real estate, this is dependent on a home's location. 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.

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 are right up there with kitchens, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.