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Robert Little Appraisals, LLC has answers to "Frequently Asked Questions"

Robert Little Appraisals, LLC is always prepared to answer any questions you might have about appraisals or real estate in Collin County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to need services from Robert Little Appraisals, LLC?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the report has been completed, how can I have certainty that the value conclusion is trustworthy?
How hard is it to become certified?
Who are an appraiser's customers?
Where does Robert Little Appraisals, LLC get the information used to estimate values in Collin County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (See list of FAQ's)

The process of producing an appraisal report deals with an investigation which leads to an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to conclude the estimation of market value. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns concluding a comparison to similar homes nearby. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residence. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

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

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


What would cause me to need services from Robert Little Appraisals, LLC?   (See list of FAQ's)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To build a case for a homeowner's equity and remove PMI.
  • To fight improperly assessed property taxes.
  • If you need to settle an estate.
  • To give you an edge when purchasing real estate.
  • To figure out the most probable price when putting your home on the market.
  • 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 property.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.


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

The appraiser is not a home inspector and he or she does not do a complete home inspection. The purpose of a home inspection is to investigate the structure of the house from basement to attic. The archetypal home inspector's report will include an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (See list of FAQ's)

Simply, they have nothing in common. The CMA utilizes market trends to create most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include neighborhood and building costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. 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 accept a flat fee for work they perform, regardless of their value conclusion.

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

The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and other intended users.
  • 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 appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was entailed in the process of completing the appraisal.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report


Once the report has been completed, how can I have certainty that the value conclusion is trustworthy?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used a suitable analysis of the information.

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

  • That appraisal services were provided in a careful and conscientious fashion.

  • The final appraisal report was clear, sound and defensible.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that give us the background to formulate an unbiased opinion. Likewise, appraisers must stick to a meticulous industry code of ethics and observe 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).


   (See list of FAQ's) Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (See list of FAQ's)

Most of the time, appraisers are hired by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Robert Little Appraisals, LLC get the information used to estimate values in Collin County or other areas?   (See list of FAQ's)

Gathering information is one of the primary roles of an appraiser. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.


Why should I hire a licensed appraiser?   (See list of FAQ's)

An appraisal is a valuable tool anytime your home's value is relevant to a financial decision. When selling your home, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Robert Little Appraisals, LLC is the best documentation to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.


What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This additional policy takes care of the lender in the event a borrower defaults on the loan and the value of the home is less than what is owed on 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 savings from getting rid of your PMI pays for the appraisal in no time. Nobody is more qualified than Robert Little Appraisals, LLC when it comes to analyzing real estate appreciation in McKinney and Collin County. Contact us today.

How do I get ready for the appraiser?   (See list of FAQ's)

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. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • List of personal property to be sold with the home.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Brag sheet that lists major home improvements and enhancements, 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 is "Market Value?"   (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."



Does the appraisal belong to the bank or the consumer?   (See list of FAQ's)

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 included with all the other closing documents - but is not entitled 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 cases, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


Are some home improvements more worthwhile than others?   (See list of FAQ's)

The answer to this is different depending upon the location of the home. 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. 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, work that may not add value would be painting just for the sake of redecorating.

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