Appraisal myths debunked

It is enforced by legal agencies that a real estate appraiser must be state-licensed to write appraisals for federally-supported real estate transactions in Colorado. Also by law, you are entitled to demand a copy of the completed appraisal report from your lending agency. Contact Appraise Colorado Inc if you have any concerns about the appraisal procedure.

Myth: Market value will be similar to the assessed value of the property.

Fact: While most states support the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period.

Myth: The appraised value of a property will vary depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is established, it should be similar to the replacement cost of the property.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the house were rebuilt, the dollar amount necessary to do so would be the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the cost of a property.

Fact: An appraisal is an amalgamation of data concluded from the house's size, location, proximity to certain facilities, the condition of the property and the cost of recent comparable sales. You can depend on Appraise Colorado Inc's staff to be ethical in assessing this information.

Myth: When the economy is robust and the worth of houses are found to be appreciating by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: Any price at which an appraiser concludes concerning a specific property is always individualized, based on certain factors derived from the data of comparable properties and other considerations within the property itself. This is true in fair economic times as well as bad.

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Myth: You can commonly find what a property is worth simply by looking at the exterior.

Fact: There are a multitude of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by viewing the house from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they legally own their appraisal.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. Home buyers have to be given a version of the document through request due to the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal so long as it satisfies the needs of their lending company.

Fact: It is a very good idea for consumers to check over a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing helpful and often-revealing information - including 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.

Myth: Appraisals are ordered only to estimate home values in home sales involving mortgage-lending deals.

Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: Appraisal reports are nothing like a home inspection report. The task of the appraiser is to find an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to determine the condition of the property and its major components, then write a report on these conclusions.