MJR Residential has answers to "Frequently Asked Questions"

MJR Residential is always happy to elaborate on any inquiries you might have about appraisals or real estate in Harris County. Contact MJR Residential today to see how we can help you with your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
What would cause me to require a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the report is done, how can I have assurance that the value indicated is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Harris 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?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (See list of FAQ's)

The process of writing an appraisal report consists of an inspection which forms an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the depreciation and physical dilapidation, adding the land value. The Sales Comparison Approach deals with searching for similar properties in close proximity and figuring out the value based on making a comparison of those homes to the home being investigated. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does   (See list of FAQ's)

An appraiser offers a fair and credible opinion of market value, in the support of real estate transactions. Appraisers summarize their expert conclusions in appraisal reports.


What would cause me to require a real estate appraisal?   (See list of FAQ's)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To fight improperly assessed property taxes.
  • To deal with an estate.
  • To offer you a leg-up when purchasing a home.
  • To determine an honest property value when selling your home.
  • 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.
  • It's possible you could be involved in a lawsuit - an appraisal will help.
For a more extensive explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (See list of FAQ's)

Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the available structure and systems of a house, from the roof to the foundation. The archetypal home inspector's report will contain an evaluation of the integrity of the house's heating systems, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (See list of FAQ's)

Frankly, it's like comparing Shakespeare to reality TV. The CMA depends on vague market trends. Appraisals use comparable sales which are valid resources. Area and building values are also important in an appraisal. 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 most significant factor is who's behind the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who made a career on valuing homes in and around Harris County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their outcome.

What's in an appraisal report?   (See list of FAQ's)

Each appraisal should indicate a supported value opinion and will document the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The purpose of the assignment.
  • The type of value contained and a definition of the value reported.
  • 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 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 included in the process of completing the job.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have assurance that the value indicated is accurate?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis utilized in the appraisal was suitable.

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

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

  • The final appraisal report was understandable, credible and defensible.
To become a state licensed appraiser, we must fulfill intense education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Licensing and certification takes coursework, tests and real world experience. Once licensed, he/she is required to engage in continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who do appraisers work for?   (See list of FAQ's)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure a home involved in a mortgage transaction is adequate collateral for a 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 Harris County or other areas?   (See list of FAQ's)

One of the main things an appraiser does is to collect property data. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser gathers 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?   (See list of FAQ's)

If you're involved in any kind of financial decision and the value of your home matters, you'll want a full appraisal. For those selling a home, you'll want to figure out the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from MJR Residential is the best way to ensure assets are divided properly. 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?   (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional plan guards the lender in the event a borrower doesn't pay on the loan and the value of the home is lower than what the borrower still owes on the loan. 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.

The money you keep from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in no time. MJR Residential is a name you can trust when it comes to value trends in Houston and Harris County. Contact us today.

Should I do anything in advance of the appraisal inspection   (See list of FAQ's)

The first step in most appraisals is the property inspection. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • A survey or plot map of the property and building (if readily available).
  • List of personal property to be sold with the building.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean?   (See list of FAQ's)

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?   (See list of FAQ's)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - 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 engages 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 stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (See list of FAQ's)

It really depends on the market. 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. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.