Appraisal myths & facts
It is required by law that a real estate appraiser is required to be state-licensed to perform appraisals for federally-related real estate purchases in Colorado. The law gives you the right to acquire a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: While most states back the concept that assessed value is the same as estimated market value, this commonly is not the case. There are times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller can have an influence in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the house will be is on par with the market value.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount necessary to reconstruct a house is what forms the replacement cost.
Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to arrive at the worth of a home.
Fact: An appraisal report is an assertion of data based on the property's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can rely on Appraise Colorado Inc's appraisers to be ethical in assessing this data.
Myth: As houses appreciate by a certain percentage - in a robust economic state - the houses around the appreciating properties are expected to increase by the same amount.
Fact: All appreciation of value is on an individual basis, determined by data on relevant elements and the data of comparable homes. It makes no difference whether the economy is excellent or bad.
Have other questions about appraisers, appraising or real estate in Arapahoe County or Aurora, CO?Contact us
Myth: You can usually tell what a property is worth simply by looking at the exterior.
Fact: House worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by viewing the property from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they legally own their appraisal report.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the report. However, consumers have to be given a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even care about what the appraisal contains so long as their lending agency is satisfied.
Fact: Only if consumers check out a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing helpful and often-revealing information - including, but not limited to, 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. The job of the appraiser is to form an opinion of value in the appraisal process and through producing the report. The point of a home inspector is to assess the condition of the property and its major components, then compose a report on these inspection.