MJS Appraisal Services has answers to "Frequently Asked Questions"

MJS Appraisal Services is always willing to elaborate on any concerns you might have about appraisals or real estate in Tarrant County. Contact us today to see how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would need your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the appraisal has been completed, how can I have certainty that the final number is trustworthy?
How are appraisers certified?
Who hires MJS Appraisal Services
Where does MJS Appraisal Services get the data used to estimate values in Tarrant County or other areas?
Why do I need a professional appraisal?
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"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Top)

The procedure of performing an appraisal consists of an evaluation which forms an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus depreciation and physical deterioration, 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. 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 produce.

Describe what an appraiser does   (Top)

An appraiser provides an objective and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers reveal the details of their expert conclusions in appraisal reports.


What are the reasons I would need your services?   (Top)

There are a lot of reasons to order an appraisal from MJS Appraisal Services with the usual reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:
  • To get a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To fight inflated property taxes.
  • To handle an estate.
  • To offer you a negotiating tool when purchasing a home.
  • To determine the most probable property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a civil case.
Click here for a more detailed explanation of the process dealing with getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Top)

Home inspectors do not generate an opinion of value and do not do appraisal reports. The purpose of a home inspection is to investigate the structure of the property from bottom to top. Commonly, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Frankly, it's apples and oranges. The CMA utilizes market trends to create most of their business. The appraisal is based on specific proven comparable sales. The appraisal report will also include area and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their outcome.

What are the contents of an appraisal report?   (Top)

Each appraisal must indicate a supported value opinion and will document the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Relevant property characteristics, including: location, physical attributes, 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.
  • 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 job.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been completed, how can I have certainty that the final number is trustworthy?   (Top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained analysis of the information.

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

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

  • That a trustworthy, supportable appraisal report was communicated.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the objective of being able to provide unbiased value opinions. In addition, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Licensing and certification requires classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires MJS Appraisal Services   (Top)

Commonly, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does MJS Appraisal Services get the data used to estimate values in Tarrant County or other areas?   (Top)

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

General data is gathered from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

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


Why do I need a professional appraisal?   (Top)

If you're making any kind of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your home, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from MJS Appraisal Services is the best way to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.


What exactly is PMI and how can I get rid of it?   (Top)

PMI is short for for Private Mortgage Insurance. PMI guards the lender in the event a borrower doesn't pay on the loan and the value of the house is less than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly house payment include a fee for PMI?Call MJS Appraisal Services today at 817.423.8618 or send us an e-mail. A current appraisal could save you thousands.

Should I do anything in advance of the appraisal inspection   (Top)

The first step in most appraisals is the property inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its amenities. Inside, make sure it is clutter free and that 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.

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 available).
  • List of personal property to be sold with the home.
  • Title policy that describes encroachments or easements.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"?   (Top)

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?   (Top)

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 entitled 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 cases, the appraiser may stipulate how the appraisal can be used; 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.


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

This really depends on where the home is. 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 move. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.