Appraisal myths & facts

Legally, an appraiser needs to be state certified to perform legitimate real estate appraisals for federally-related transactions. You are also entitled by law to acquire a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be the same as to market value.

Fact: It might be that Colorado, like most states, supports the idea that the assessed value is no different from the market value; however, this is not often the case. Often when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller will have some pull in the value of the home depending upon for whom the appraiser is working.

Fact: The value of the home does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the worth of the house. This means that he will provide business with impartiality and independence regardless for whom the appraisal is produced.

Myth: Market value should equal replacement cost.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. If the property were rebuilt, the dollar amount needed to do so would form the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a house.

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

Myth: In a robust economy - when the sales prices of properties in a given area are reported to be appreciating by a certain percentage - the costs of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Worth appreciation of a specific property is always concluded on an individualized basis, factoring in information on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just inspecting the property from the outside.

Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal.

Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the document. However, consumers have to be provided with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the necessities of their lending company.

Fact: Only if home buyers read a copy of their report can they ensure 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 appraisal report makes an excellent record for future reference, comprised of 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 vicinity.

Myth: The only reason someone would hire an appraiser is if a home needs its price assessed in a lender-based sales transaction.

Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform 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: An appraisal does not serve the same purpose as an inspection. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will write a report that will show the condition of the property and its major components and possible damage.