Michelle E. Lyons, Appraiser has answers to "Frequently Asked Questions"

Michelle E. Lyons, Appraiser is always more than happy to answer any concerns you might have about appraisals in El Paso County. Contact Michelle E. Lyons, Appraiser today to talk about how we can help solve your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
Why would I require a real estate appraisal?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the appraisal has been completed, how can I have assurance that the value conclusion is veritable?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Michelle E. Lyons, Appraiser get the information used to estimate values in El Paso County or other areas?
What can a full appraisal do for 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"
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (See list of FAQ's)

The process of producing an appraisal report consists of an evaluation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. The Cost Approach is one of the approaches that appraisers use to find value; it involves figuring what the improvements would cost without physical deterioration, plus the land value. The most common approach in figuring the value of a house is the Sales Comparison Approach which deals with making a comparison to similar houses nearby. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house. 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 provides an impartial and well supported determination of market value, in the support of real estate exchanges. Appraisers show their professional analysis in appraisal reports.


Why would I require a real estate appraisal?   (See list of FAQ's)

There are many reasons to purchase an appraisal from Michelle E. Lyons, Appraiser with the most common reason being real estate and mortgage transactions. Some other reasons for getting an report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To contest high property taxes.
  • If you need to settle an estate.
  • To give you a leg-up when purchasing real estate.
  • To figure out an honest price when listing your home.
  • To protect 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 are ever involved in a civil case.
For a more detailed explanation of the appraisal process click here.


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

Appraisers do not do provide home inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and appliances of a home, from the top to the bottom. Commonly, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (See list of FAQ's)

Simply put, it's apples and oranges. The CMA relies on indefinite local market trends. The appraisal is based on similar verifiable comparable sales. Area and construction prices are also precedent in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is actually the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report?   (See list of FAQ's)

Each appraisal must demonstrate a supported estimate of value and should clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Pertinent property characteristics, including: location, physical attributes, legal attributes, economic factors, 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 activity of completing the assignment.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, how can I have assurance that the value conclusion is veritable?   (See list of FAQ's)

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

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

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

  • That a solid, supportable appraisal report was communicated.
There are rigorous education and practical experience requirements that must be fulfilled in order to get an appraisal license in Texas. In addition, appraisers must obey a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and real world experience. Once licensed, he or she must then complete continuing education courses in order to keep the license up to date. 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 typical client, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Michelle E. Lyons, Appraiser get the information used to estimate values in El Paso County or other areas?   (See list of FAQ's)

One of the most important tasks an appraiser must accomplish is to collect property data. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a number of places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, so 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 properties in the same market.

What can a full appraisal do for me?   (See list of FAQ's)

If you're making some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. This added plan takes care of the lender in case a borrower is unable to pay on the loan and the value of the house is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Is PMI a part of your monthly mortgage payment?Call Michelle E. Lyons, Appraiser today at 9155912060 or send us an e-mail. Documentation of your home's present value could save you thousands.

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

We start with an inspection of the property. During this process, the appraiser 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 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 the appraiser can easily access appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • List of personal property to be sold with the home.
  • Most recent real estate tax bill from El Paso and or legal description of the property.
  • Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

Define "Market Value"   (See list of FAQ's)

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."

Does the appraisal belong to the bank or the consumer?   (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 included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 were second, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.