Shinpaugh Appraisal Company has answers to "Frequently Asked Questions"


	Shinpaugh Appraisal Company is prepared to talk to you about any questions you might have about appraisals or real estate in Dallas and Dallas County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to request services from Shinpaugh Appraisal Company?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have certainty that the final number is accurate?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Dallas County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Back to top)

An appraiser performs an estimation that generates an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value. One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which involves making a comparison to similar homes close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is primarily 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 would bring in.

Describe what an appraiser does (Back to top)

An appraiser forumlates a fair and credible assessment of market value, often in the context of a real estate purchase. Appraisers summarize their expert analysis in appraisal reports.

What would cause me to request services from Shinpaugh Appraisal Company? (Back to top)

There are a lot of reasons to obtain an appraisal from Shinpaugh Appraisal Company with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:

If you are applying for a loan.
To lower your tax burden.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To contest improperly assessed property taxes.
If you need to take care of an estate.
To give you a leg-up when purchasing a home.
To figure out a likely 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 home.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more detailed description of the appraisal process click here.

How is an appraiser different than a home inspector? (Back to top)

Appraisers do not do complete house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and systems of a home, from the roof to the bottom. The archetypal property inspector's report will include an evaluation of the integrity of the house'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)? (Back to top)

To be honest, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are valid resources. Also, the appraisal checks other factors like condition, neighborhood and building prices. All a CMA does is generate 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 who's doing 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. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

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

Each appraisal must reflect a believable estimate of value and should identify the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
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 used when completing the job.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have certainty that the final number is accurate? (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

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

That appraisal services were not carried out in a careless or negligent manner.

That a solid, defensible appraisal report was conferred.

To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. Plus, appraisers must follow a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured 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 typically translates to many hours of coursework, tests and practical experience. Once licensed, he/she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Back to top)

Mortgage lenders are an appraiser's typical client, using their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Dallas County or other areas? (Back to top)

Gathering data is one of the main things an appraiser engages in. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a numerous sources. To research recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents. Appraisers routinely have to report when a property lies in a flood zone, so 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 past experience in creating appraisals for other properties in the same market.

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

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. If you're selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. 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. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI stands for Private Mortgage Insurance. PMI protects the lender in case a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The amount you keep from dropping the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Shinpaugh Appraisal Company when it comes to analyzing real estate appreciation in Dallas and Dallas County. Contact us today.

Should I do anything in advance of the appraisal inspection (Back to top)

The first step in most appraisals is the home inspection. 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. 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 landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access items 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:

A survey or plot map of the property and building (if available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and upgrades, 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).
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

How does an appraiser define "Market Value"? (Back to top)

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."

Does the appraisal belong to the bank or the consumer? (Back to top)

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 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 engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state 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? (Back to top)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the best ROI 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.