Appraisal myths & facts
It is mandated by law that an appraiser is required to be state-licensed to perform appraisals for federally-related property transactions in Colorado. Also by law, you have the right to receive a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: Market value must be similar to the assessed value of the property.
Fact: While most states support the suggestion that assessed value equates estimated market value, this usually is not the case. There are times when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the Parker have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the house will vary.
Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the house were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to figure out the cost of a house.
Fact: An appraisal is a collection of data based on the home's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can count on Appraise Colorado Inc's staff to be professional in assessing this data.
Myth: In a robust economy - when the prices of houses in a given county are reported to be increasing by a certain percentage - the costs of individual houses in the proximity can be expected to appreciate by that same percentage.
Fact: Price appreciation of a specific house has to be determined on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. It makes no difference if the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Arapahoe County or Parker, CO?Contact Appraise Colorado Inc
Myth: The house's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior appraisal.
Fact: House value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data needed.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal report.
Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lender 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. There is a wealth of information contained in an appraisal 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 vicinity.
Myth: Appraisals are ordered only to assess home values in property 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 perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection report. An appraiser forms an opinion of value in the appraisal process and resulting report. A home inspector analyzes the condition of the house and its major components and reports their findings.