 copyright ©2004 harry hunsicker |
HUNSICKER APPRAISAL COMPANY, INC 4901 cole avenue / dallas,
texas 75205-3401 |
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SERVICES TEXAS APPRAISAL DISTRICTS ONLINE
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A partial list of our services include: fee appraisal for mortgage lending purposes, condemnation valuation, expert testimony involving real estate valuation, as well as consulting on buy-sell scenarios and other real estate matters. Please contact us for more information. (We do not perform surveys, environmental reports, or appraisals of single family residences.) An appraisal is an unbiased opinion of value, issued by a professional with no interest in the outcome of the process. Inherent in this definition is the understanding that the appraiser works for a flat fee, rather than a contingency or percentage payment. The Appraisal Process - Valuing real estate involves two distinct steps: the development of the number and the reporting of same. In preparing a valuation for an improved property (a piece of land which has improvements on it, i.e. a building), the appraiser uses three separate techniques: 1) The Cost Approach estimates the dollar amount to reproduce the building, subtracts any or all of several forms of market-derived depreciation that may apply and adds this number to the value of the underlying land. Most professionals agree the cost approach is a good method for properties that are new or nearly so, and for special use developments, like churches, stadiums, etc. For properties that are older than say five or ten years, the estimation of depreciation is often not as precise as the appraiser would like, rendering this method not as effective. 2) The Sales Comparison Approach is often referred to as the market approach and is the technique most non-industry people are familiar with as almost everyone practices it in one form or another. The appraiser compares similar properties that have sold recently to the property under consideration. The similar properties, called comparables, are adjusted for differences with the subject. If a comparable is judged to be superior to the subject in some way, its sale price is adjusted downward. Conversely, if it is judged to be inferior, it is adjusted upward. CIA - comp inferior, add CBS - comp superior, subtract After applying these upward and downward changes, the range of adjusted sales prices of the comparables are analyzed and the appraiser makes an informed estimate as to which segment of the range properly applies to the subject. 3) The Income Approach places a value on the net rental income a property generates. The appraisers estimates the net income by deducting expenses from rents. The net income is then capitalized by an appropriate, market-derived rate. This rate is expressed as a percentage and is a return on and a return of your investment and is related to risk. Currently, your bank pays you a capitalization rate of roughly 3% on money you deposit in a savings account. If you chose to invest that money in real estate you would expect to receive a higher rate but knowing there was a higher risk associated with that investment. Reconciliation - After reaching values by the three methods briefly described above, the appraiser reconciles them together, picking the value or values which best indicated the market value of the subject. Reporting of the Appraisal - After arriving at a value using the process described above, the appraiser, in consultation with the client, must choose a reporting method. There are three distinct styles of reporting the value conclusions: 1) Restricted reporting - states information and conclusions. This reports includes a prominent statement that limits reliance on the report to the client and warns that the reports cannot be understood properly without additional information in the work file of the appraiser.2) Summary reporting - summarizes information, conclusions and analysis. 3) Self-Contained reporting - details and fully describes information, conclusions and analysis. copyright © 2004 hunsicker appraisal company, inc. |