Appraisals

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APPRAISALS

By Martin Langley .

Martin Langley SRA, SRPA has over 15 years experience in appraising and was formerly Chief Appraiser for GMAC. He is a Realtor Associate with Clopton Realty and also is the Principal of Langley Appraisals here in Houston and can arrange your mortgage for purchase or refinance.

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What is a residential appraisal?

Residential appraisals for mortgage whether purchase or refinance are completed on a written report called a Uniform Residential Appraisal Report (FNMA form 1004 URAR) by a State licensed appraiser.

The report will provide an estimated market value derived by adjusting local, similar recent "comparable" sales. These sales are adjusted to reflect differences between your home and the comparables.

What an appraisal is not:

It’s not an appraiser’s arbitrary opinion of how much your home is worth. Your realtor, your next door neighbor, yourself and of course the ‘market’ of buyers will all have differing views on how much hard money they would pay for your home and you may have a specific opinion on how much you would accept. However, an appraisal has to reflect ‘the market’ in general so an appraisal will rarely please everyone. It is also governed by availability of good comparables.

What does the appraiser do?

Pre-visit research to find out about your home from the tax records, MLS history, maps and extensive research to find the most similar comparables that sold most recently. What others ‘ask’ for their homes (list prices) are not usable data. It has to be verifiable hard sold evidence.

Then the appraiser will inspect and photograph your home (or the one you are buying) measure it, make notes about its condition, its features and neighborhood. Then he will drive the neighborhood to photograph the best half a dozen comparables of which he will use three in the report. Finally he will write the report in the office and deliver it to the client.

Do I need a Home Inspection?

The appraiser is not a state licensed Home Inspector. The appraiser will not test appliances, test electrical boxes, search the loft space for termites or structural defects. You are well advised to have a licensed Home Inspector, an Electrical inspection and a Roof Inspection and Pool Inspection before buying potential problems.

A large number of homes suffer foundation movement or failure. Make sure you have the Home Inspector address the foundations in his report. Interview three inspectors by phone and ask their experience in foundation inspections and how they will address any problems in their report.

Finally, make these arrangements yourself! Don’t palm it off on your Realtor. Get your Realtor’s advice and possibly a list of names. But, it’s your commitment and your money. Make these inspectors directly responsible to YOU and have the reports sent only to YOU. Discuss the impacts of defects discovered through these reports on your contract with your Realtor. Make sure your Realtor is working for you; read your Brokerage Services disclosure.

Can you get a copy?

You paid an appraisal fee didn’t you. But you probably paid your mortgage company so the appraiser has no direct client-relationship with you. You should ensure up front that you would get a copy of the appraisal from your mortgage company and find out at what stage of the process you will get it.

PMI Relief or Credit Union Appraisals?

Some lenders especially those doing PMI relief and some credit unions may tell you to get an appraisal yourself. Make sure you only use state licensed or certified appraisers! We can help you. Get a copy of your lender’s appraisal instructions. We will put the name of your lender on the appraisal but as you will pay us direct we will mail the appraisals to YOU unless you instruct otherwise.

Licensed? Certified? What’s the difference?

There are two levels of state qualification of appraisers.

A ‘certified appraiser’ has qualified at a higher level of examination testing and qualifying experience than a ‘licensed appraiser’. Certified appraisers are also classified as residential only or ‘general’ for commercial or residential work. While Martin Langley has the highest level (General Certified) he currently specializes in residential work.

How Much?

Cost varies with complexity and between appraisal firms. Martin Langley charges from $250 to $325 for single family tract appraisals depending on location, size, availability of comparables, purpose of the appraisal, etc. Custom homes or non-tract homes (acreage) by quote.

When to have an appraisal:

If you are refinancing or buying a new home then your lender will select and arrange for an appraisal on your home. You can ask your lender to call (713) 463 7715 or page me (Pager 713 616 2439) for a quote.

Home Buyers Appraisal

However, if you are considering a home to buy then many buyers are making their offer contract conditional upon their own buyer’s appraisal.

Why? Because many lenders won’t let you see the appraisal until you are at the closing table. By then its too late! There can be many observations in an appraisal not just a value conclusion that may impact your decision to proceed. It is your money. It is also your credit and your 30 years commitment going into a loan. A ‘Buyer’s Appraisal’ may be the best investment you can make.

You might not be able to use that appraisal for a future loan depending on the lender you use. If you prefer we can put you in contact with bi-lingual (Vietnamese, Spanish and Chinese speaking) mortgage professionals who will be happy to use our appraisals in your loan. Appraisals generally have a life for loan underwriting purposes of about three months.

Pre-Listing Appraisal?

OK, so you want to list your home. What price? Well an appraisal is probably not the best option here. Appraisals are fairly rigid and reflect sold prices and they cost money.

You might be better advised to have a no obligation "CMA" Comparative Market Analysis from a Realtor on your home. These are generally low cost or free and they will analyze local sales trends for the last year or so and will arrive at a high, middle and low estimate based on price per square foot. Homes that are not typical of the neighborhood such as oversize homes can be over-listed using this method.

Size Rule

Remember generally the larger the home the lower the value per square foot for that neighborhood. Go to any new builder and do the maths on their price list by dividing price by the floor size.

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Can we help?

Appraisals ~ Mortgage for sale or refinance

Home Sales or Home Search.

Martin Langley, Tim McGee or Bill Clopton or any of our other Realtors would be pleased to help you.

Call Martin Langley to help you find the best mortgage in town.

Pager (713) 616 2439. Tel (713) 463 7715

Please include your phone & fax #s and e-mail address.

Langley Apprasals - Martin Langley Appraiser/Owner

This page was last updated on 06/25/00.