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Malechek Appraisal, Inc. has answers to "Frequently Asked Questions"

Malechek Appraisal, Inc. is always prepared to talk to you about any inquiries you might have about appraisals in Dallas and Dallas County. Contact Malechek Appraisal, Inc. today to see how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the appraisal has been completed, how can I have confidence that the final number is veritable?
How are appraisers certified?
Who employs appraisers?
Where does Malechek Appraisal, Inc. get the data used to estimate values in Dallas County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (List of questions)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the depreciation and physical dilapidation, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which deals with concluding a comparison to comparable houses nearby. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a residence. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (List of questions)

An appraiser provides an unprejudiced and well supported opinion of market value, to be used in making real estate transactions. Appraisers present their conclusions in appraisal reports.


What would cause me to need a real estate appraisal?   (List of questions)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To offer you a leg-up when purchasing real estate.
  • To determine a reasonable price when putting your home on the market.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process involved in getting an appraisal.


What is the difference between an appraisal and a home inspection?   (List of questions)

Appraisers do not do complete residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the property from basement to top. Generally, a home inspection report will explain the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (List of questions)

Frankly, they share nothing in common. What the CMA depends on are superficial trends. An appraisal is based on comparable sales that can be verified by public record. In addition, the appraisal looks at other factors like condition, neighborhood and building 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.

The credentials of the person creating the report is hands down 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, generate CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report?   (List of questions)

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 whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The reason for the appraisal.
  • 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!)
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the property rights 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 other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was involved in the activity of completing the assignment.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, how can I have confidence that the final number is veritable?   (List of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used a suitable analysis of the information.

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

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

  • That a trustworthy, substantiated appraisal report was communicated.
To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained. In addition, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who employs appraisers?   (List of questions)

Mortgage lenders are an appraiser's typical customer, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Malechek Appraisal, Inc. get the data used to estimate values in Dallas County or other areas?   (List of questions)

One of the primary things an appraiser does is to assimilate property data. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a many 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 often have 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 service.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me?   (List of questions)

An appraisal is a valuable tool whenever the value of your home is relevant to a financial decision. If you're selling your home, an appraisal will help you determine 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 house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it?   (List of questions)

PMI is an acronym for Private Mortgage Insurance. It takes care of the lender in case a borrower defaults on the loan and the market price of the home is lower than the balance of 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 savings from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Nobody is more qualified than Malechek Appraisal, Inc. when it comes to analyzing real estate appreciation in Dallas and Dallas County. Contact us today.

Should I do anything in advance of the appraisal appointment   (List of questions)

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 condition of its amenities. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • Title policy that describes encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

Define "Market Value"   (List of questions)

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."

Once complete, who actually owns the appraisal report?   (List of questions)

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 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.

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

Which home renovations add the most to the price?   (List of questions)

The added value of a particular amenity truly depends on the local market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned 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 weren't far behind, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.