Zacour & Associates, Inc. has answers to "Frequently Asked Questions"


	Zacour & Associates, Inc. is always ready to answer any inquiries you might have about appraisals in El Paso and El Paso County. Contact Zacour & Associates, Inc. today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would a person require your services?
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 can I expect to see in my appraisal report?
After completing the appraisal, how can I have confidence that the value conclusion is veritable?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Zacour & Associates, Inc. get the information used to estimate values in El Paso County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Top)

An appraiser performs an evaluation that generates an opinion of value. The appraiser must use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves concluding what the improvements would cost without physical degradation, plus the land value. The Sales Comparison Approach deals with searching for similar homes nearby and discovering the value based on comparing those houses to the house being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a house. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does (Top)

An appraiser produces a fair and credible determination of market value, in the support of real property exchanges. Appraisers summarize their expert analysis in appraisal reports.

Why would a person require your services? (Top)

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.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest inflated property taxes.
To handle an estate.
To offer you a negotiating tool when purchasing a home.
To figure out a likely 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 lawsuit.

If you need a more detailed explanation of the appraisal process, please click here.

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

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. A third-party home inspector will evaluate the structure of the home, from the top to the foundation. The usual house inspector's report will contain an evaluation of the integrity of the house's heating system, 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.

My agent performed a CMA for me. Is that the same as an appraisal? (Top)

To be honest, they share nothing in common. What the CMA depends on are vague trends. Appraisals use comparable sales which are valid resources. In addition, the appraisal checks other factors like condition, neighborhood and construction prices. 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.

But the largest differentiator is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. The appraisal is produce 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 whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report? (Top)

Each appraisal should demonstrate a believable value opinion and should document the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the value opinion.
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
All 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.
The scope of work considered when completing the job.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have confidence that the value conclusion is veritable? (Top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal used a suitable analysis of the data.

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

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

That a solid, substantiated appraisal report was imparted.

To become a state licensed appraiser, there are education requirements as well as practical experience that must be logged. Plus, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines 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 takes classroom study, tests and real world experience. Once an appraiser is licensed, he or she is required to complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Top)

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

Where does Zacour & Associates, Inc. get the information used to estimate values in El Paso County or other areas? (Top)

Gathering data is one of the main things an appraiser performs. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is gathered from a numerous places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

Why do I need a professional appraisal? (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 home, 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. For people settling an estate or divorce, an appraisal from Zacour & Associates, Inc. is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Top)

PMI stands for Private Mortgage Insurance. It protects the lender if a borrower doesn't pay on the loan and the value of the property is less than the loan balance. 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.


	Has your home value appreciated since you first purchased? Call Zacour & Associates, Inc. today at 915-581-1141 to see if you can save money by removing your Private Mortgage Insurance payment.

Do you need anything from me in advance? (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 condition of its amenities. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if readily available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "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 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.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

Which home renovations add the most to the price? (Top)

The added value of a particular amenity truly depends on the local market. 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.

As a rule, the most value returned from renovating a home comes in the kitchen. 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, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.