York & York, Inc. has answers to "Frequently Asked Questions"

York & York, Inc. is willing to reply to any concerns you might have about appraisals or real estate in Denton County. Contact York & York, Inc. today to talk about how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would a person request a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
After completing the appraisal, what guarantee is there that the value indicated is valid?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Denton County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



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

An appraisal report is an inspection leading to an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves concluding what the improvements would cost without physical depreciation, adding the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which deals with making a comparison to similar houses nearby. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a residential property. The Income Approach is mainly used for figuring out 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.

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

An appraiser generates a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers illustate their professional conclusions in appraisal reports.


Why would a person request a real estate appraisal?   (See list of FAQ's)

There are many reasons to order an appraisal from York & York, Inc. with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
  • If you are applying for a loan.
  • To reduce your property taxes.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To contest high property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing a home.
  • To find an honest sales price when selling your home.
  • 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 house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
For a more detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (See list of FAQ's)

Home inspectors do not provide an opinion of value and are not appraisers. The purpose of a home inspection is to investigate the structure of the home from bottom to attic. For the most part, a home inspection report will discuss the amenities and the requirements of the house: 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.

My agent performed a CMA for me. Is that the same as an appraisal?   (See list of FAQ's)

To be blunt, it's night and day. The CMA uses market trends to create most of their business. Appraisals use similar sales which are valid resources. The appraisal report will also contain area and building values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's creating the report. Real estate agents produce CMA's, and they don't always know the whole market or bear 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. Moreover, the appraiser is an independent party, with no conditional interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report?   (See list of FAQ's)

Every report must reflect a supported estimate of value and should clearly state the following:
  • The client and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value contained and a definition of the value reported.
  • 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 attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures 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 involved in the process of completing the appraisal.
For a more detailed look at the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the value indicated is valid?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis utilized in the appraisal was proper.

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

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

  • The final appraisal report was transparent, sound and conclusive.
To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be attained. In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines 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 of Real Estate Appraisers are different from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or 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 are an appraiser's customers?   (See list of FAQ's)

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

Where does an appraiser get the information used to estimate values in Denton County or other areas?   (See list of FAQ's)

Collecting information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is taken 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) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely need 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 product.

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

What can a full appraisal do for me?   (See list of FAQ's)

An appraisal is a worthwhile anytime the value of your home is pertinent to some financial decision. If you're selling your house, 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 York & York, Inc. is the best documentation to ensure assets are split up properly. Simply put, 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 the common abbreviation for for Private Mortgage Insurance. This supplemental plan covers the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than York & York, Inc. when it comes to analyzing real estate appreciation in Lewisville and Denton County. Contact us today.

Should I do anything in advance of the appraisal appointment   (See list of FAQ's)

We begin with an inspection of the property. 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 condition of its features. On the home's interior, 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 exterior walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements when the property is being 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)

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 report - 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 hiring the appraiser for things outside securing a mortgage. In these situations, 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?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned 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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.