Appraisal myths debunked

It is required by law that a real estate appraiser must be state-licensed to produce appraisal reports for federally-related property transactions in Colorado. The law gives you the right to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value will always be the same as the assessed value of the property.

Fact: It is probable that Colorado, like most states, validates the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Sometimes when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller sometimes may have an influence in the cost of the property depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is ordered.

Myth: Market value will equal replacement cost.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain house, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: There are certain ways that appraisers use to show the cost of a house, such as the price per square foot.

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to some facilities, the condition of the home and the value of recent comparable sales. You can count on Appraise Colorado Inc's appraisers to be professional in assessing this data.

Myth: In a powerful economy - when the sales prices of homes in a given area are reported to be rising by a certain percentage - the prices of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: Any value at which an appraiser arrives concerning a particular house is always personalized, based on certain factors found from the data of comparable homes and other specifications within the property itself. It doesn't matter if the economy is on the rise or declining.

Myth: You can generally see what a house is worth simply by looking at the exterior.

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by looking at the home from the exterior.

Myth: Because the consumer is the one who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given it by their lender.

Myth: There's no need for consumers to even concern themselves with what the appraisal contains so long as their lender is satisfied.

Fact: A home buyer should definitely inspect their appraisal report; there might be some questions or some worries with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an appraisal report that should be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.