Digital Valuation Solutions has answers to "Frequently Asked Questions"

Digital Valuation Solutions is ready to reply to any concerns you might have about appraisals in HARLINGEN and Cameron County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request services from Digital Valuation Solutions?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the report has been completed, how can I have certainty that the value conclusion is trustworthy?
How difficult is it to become certified?
Who employs appraisers?
Where does Digital Valuation Solutions get the information used to estimate values in Cameron 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?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (Top)

The method of producing an appraisal report deals with an investigation which leads to an opinion of value. The real estate appraiser will use a few "approaches," typically three, to draw up the estimation of market value. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the house, minus depreciation and physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to find the market value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Top)

An appraiser produces an objective and well supported opinion of market value, in the support of real estate transactions. Appraisers summarize their professional analysis in appraisal reports.


What would cause me to request services from Digital Valuation Solutions?   (Top)

There are many reasons to obtain an appraisal from Digital Valuation Solutions with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
  • If you are applying for a loan.
  • To lower your tax burden.
  • To build a case for a homeowner's equity and remove insurance.
  • To fight high property taxes.
  • If you need to take care of an estate.
  • To offer you a leg-up when purchasing real estate.
  • To find a reasonable price when selling real estate.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS need an appraisal on every house.
  • If you ever find yourself in a lawsuit.
For a more detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Top)

The appraiser is not a home inspector and does not do a complete home inspection. A third-party home inspector will inspect the structure of the home, from the top to the bottom. The standard home inspector's report will contain an evaluation of the condition 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.

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

Frankly, it's like comparing broadband and dial-up. The CMA utilizes market trends to create most of their business. An appraisal utilizes comparable sales that can be verified by public record. In addition, the appraisal looks at other factors like condition, location and building costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is the person creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, state licensed professional who has formed a career on valuing real estate in and around Cameron County is behind the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

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

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
  • 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.
  • What was entailed 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 report has been completed, how can I have certainty that the value conclusion is trustworthy?   (Top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained a suitable analysis of the data.

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

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

  • The final appraisal report was transparent, credible and conclusive.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the end goal of being able to render unbiased value opinions. Likewise, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Digital Valuation Solutions get the information used to estimate values in Cameron County or other areas?   (Top)

One of the main tasks an appraiser performs is to compile data. Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a numerous places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely need to report when a property is in a flood zone, and 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 houses in the same market.

What can a full appraisal do for me?   (Top)

An appraisal is a worthwhile anytime the value of your home is pertinent to some financial decision. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. 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 house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

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

PMI is short for for Private Mortgage Insurance. This supplemental plan protects the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what is owed on 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.

The amount you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Digital Valuation Solutions is in the business of tracking real estate value trends in HARLINGEN and Cameron County. Contact us today.

Does the appraiser need anything from me in advance?   (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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A survey or plot map of the property and building (if available).
  • A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (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."

Does the appraisal belong to the bank or the consumer?   (Top)

In most real estate transactions, the appraisal is ordered by the lender. 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 entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these scenarios, the appraiser may state 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (Top)

This really depends on where the home is. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the best ROI 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.