Larry Brightwell has answers to "Frequently Asked Questions"


	Larry Brightwell is happy to handle any questions you might have about appraisals or real estate in Cleburne and Johnson County. Contact Larry Brightwell today to talk about how we can help you with your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would require services from Larry Brightwell?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
After completing the appraisal, how can I have confidence that the value indicated is accurate?
How are appraisers certified?
Who engages the services of appraisers?
Where does Larry Brightwell get the data used to estimate values in Johnson County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Return to top)

The procedure of performing an appraisal deals with an evaluation which forms an opinion of value. The appraiser must use a number of "approaches," typically three, to come to the estimation of market value. One of the processes 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 figuring the value of a home is the Sales Comparison Approach which concerns figuring a comparison to similar houses nearby. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.

What does an appraiser do? (Return to top)

An appraiser generates an unbiased and well justified determination of market value, in the support of real property transactions. Appraisers summarize their professional conclusions in appraisal reports.

What are the reasons I would require services from Larry Brightwell? (Return to top)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:

To obtain a loan.
If you would like to lower your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To fight high property taxes.
To settle an estate.
To give you a leg-up when purchasing real estate.
To figure out an honest property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
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 extensive explanation of the process of getting an appraisal.

What is the difference between an appraisal and a home inspection? (Return to top)

The appraiser is not a home inspector nor does he/she do a full home inspection. An inspection is a third-party investigation of the available structure and systems of a property, from the roof to the bottom. Generally, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, 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? (Return to top)

To be blunt, it's apples and oranges. The CMA relies on vague trends in the market. The appraisal relies on specific definite comparable sales. The appraisal report will also contain location and construction values. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person creating the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.

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

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
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 used when completing the assignment.

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

After completing the appraisal, how can I have confidence that the value indicated is accurate? (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis contained in the appraisal was appropriate.

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

That appraisal services were delivered in a careful and cognizant fashion.

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that prepare us to produce an unbiased opinion. In addition, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification is achieved through classroom study, tests and practical experience. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

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

Mortgage lenders are an appraiser's typical customer, using their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Larry Brightwell get the data used to estimate values in Johnson County or other areas? (Return to top)

Gathering data is one of the main tasks an appraiser does. 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 gathered by the appraiser during an inspection.

General data is received from a many places. To research recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often 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 product.

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

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

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal helps you set the most appropriate price. 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 home 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? (Return to top)

PMI stands for Private Mortgage Insurance. This supplementary plan guards the lender in case a borrower defaults on the loan and the market price of the property is less 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.


	Does your monthly house payment have a lineitem for PMI?Call Larry Brightwell today at 8172965064 or send us an e-mail. Documentation of your home's present value could save you thousands.

Do you need anything from the homeowner in advance? (Return to top)

We start 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 status of its amenities. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

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 readily available).
Written property agreements, such as a maintenance easement for a shared driveway.
Most recent real estate tax bill and or legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean? (Return 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."

Who actually owns the appraisal report? (Return to top)

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 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may stipulate the purpose of the appraisal; 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.

Which home renovations add the most to the price? (Return to top)

Like all things real estate, this is dependent on a home's location. 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. 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 were second, 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 atypical for your neighborhood in terms of size.