Houston Appraisals LLC has answers to "Frequently Asked Questions"

Houston Appraisals LLC is eager to address any concerns you might have about appraisals or real estate in Youngstown and Mahoning County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would a person request services from Houston Appraisals LLC?
What is the difference between an appraisal and 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 delivered, what guarantee is there that the value indicated is valid?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Mahoning County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (Go to list of  questions)

An appraisal report is an investigation allowing the appraiser to come to an opinion of value. This opinion or estimate is found through the use of a formal process that typically uses the three main "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the house, less the depreciation and physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which involves discovering a comparison to other similar nearby properties which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a house. 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.

Describe what an appraiser does   (Go to list of  questions)

An appraiser provides an unbiased and well substantiated determination of market value, often in the context of a real estate sale. Appraisers summarize their professional conclusions in appraisal reports.


Why would a person request services from Houston Appraisals LLC?   (Go to list of  questions)

There are a lot of reasons to obtain an appraisal from Houston Appraisals LLC with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:
  • To get a loan.
  • If you would like to reduce your property 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 improperly assessed property taxes.
  • If you need to take care of an estate.
  • To give you a leg-up when purchasing real estate.
  • To determine an honest price when putting your home on the market.
  • 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 detailed explanation of the process of getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Go to list of  questions)

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

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Go to list of  questions)

Frankly, it's night and day. The CMA depends on indefinite trends in the market. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain neighborhood and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's behind 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. A certified, Ohio licensed professional who has formed a career on valuing real estate in and around Mahoning County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their value conclusion.

What are the contents of an appraisal report?   (Go to list of  questions)

Each report should indicate a credible estimate of value and must document the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • 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.
  • The scope of work considered when completing the appraisal.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what guarantee is there that the value indicated is valid?   (Go to list of  questions)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis contained in the appraisal was suitable.

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

  • That appraisal services were provided in a careful and cognizant manner.

  • That a credible, supportable appraisal report was communicated.
There are rigorous education and on the job experience requirements that must be adhered to in order to get an appraisal license in Ohio. Likewise, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once licensed, he or she is required to engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Go to list of  questions)

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

Where does an appraiser get the data used to estimate values in Mahoning County or other areas?   (Go to list of  questions)

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

General data is collected from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

How can a licensed appraiser help me?   (Go to list of  questions)

An appraisal is a worthwhile anytime the value of your home is relevant to some financial decision. When selling your house, an appraisal assists you in setting 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. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This added plan protects the lender if a borrower defaults on the loan and the market price of the house 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.

Does your monthly mortgage payment have a lineitem for PMI?Call Houston Appraisals LLC today at 3307573354 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal appointment   (Go to list of  questions)

We start with an inspection of the home. 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. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:
  • Information on the latest purchase of the property in the last three years.
  • List of personal property to be sold with the building.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • Most recent real estate tax bill and or legal description of the property.

Define "Market Value"   (Go to list of  questions)

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."

Once complete, who actually owns the appraisal report?   (Go to list of  questions)

For mortgage transactions, the lender orders 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 entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these cases, 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.

I want to get more for my house. Where should I spend money renovating?   (Go to list of  questions)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, yielding 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.