Hunsicker Appraisal Company, Inc.
4901 Cole Avenue / Dallas, Texas 75205-3401
214.521.0300 voice / 214.521.8722 fax /



Types of Properties Appraised

What the Client Should Know

Texas Appraisal Districts


Services - Hunsicker Appraisal Company provides written reports that contain opinion(s) of value on a given piece of real estate.  We do not provide oral appraisals or brokers' opinions of value.  At this time, Hunsicker Appraisal Company does not provide expert witness testimony.  Our typical client is a federally-regulated lending institution which uses the appraisal report as part of the mortgage loan process, a certification which verifies that an independent, third-party professional (the appraiser) attests to the value of an asset being loaned upon.

Definition - There are many different definitions of an appraisal but for purposes of this website, we define a real estate appraisal as an opinion of value derived by an unbiased professional with no vested interest in the outcome of the process. 

Inherent in this definition is the understanding that the final result is an opinion, not an exact scientific derivation, and that opinions, even among qualified appraisers or other real estate professionals, may differ.  Another important understanding is that the real estate appraiser, as opposed to a real estate broker, 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 opinion of value and the reporting of this value. In preparing a valuation for an improved property–a piece of land which has improvements on it, i.e. a building–the appraiser typically 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 real estate 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. Using the sale comparison approach, 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 appraiser 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. For example, suppose your bank pays you a capitalization rate of 3% on money you deposit in a savings account. If you chose to invest that money in real estate you would probably 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-Use Report - states information and conclusions. This report includes a prominent statement that warns the documents cannot be understood properly without additional information in the work file of the appraiser.

2) Summary Report - summarizes information, conclusions and analysis.

3) Self-Contained Report - details and fully describes information, conclusions and analysis.



honesty, integrity and excellence since 1967
© Copyright 2010 Hunsicker Appraisal Company, Inc.