Appraisal myths & facts
It is mandated by the government that a real estate appraiser must be state-licensed to produce appraisal reports for federally-supported home purchases in Colorado. The law gives you the right to get a copy of your finished appraisal report from your lender after it has been provided. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser should be the same as the market value.
Fact: While most states uphold the idea that assessed value equates estimated market value, this often is not the case. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the property will vary.
Fact: The opinion of value of the house does not affect the payment of the appraiser; as such, the appraiser has no pressured interest in the opinion of value of the house. This means that he will complete his job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: The replacement value of the home should be is on par with the market value.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under duress from any external group to purchase or sell. If the house were rebuilt, the dollar amount required to do so would make up the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the opinion of value of a home, such as the price per square foot.
Fact: An appraisal is an amalgamation of information concluded from the property's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can rely on Robert L Ripp, SRA's staff to be honest in assessing this data.
Myth: As properties increase their worth by a certain percentage - in a strong economic state - the houses within the same neighborhood are figured to increase by the same amount.
Fact: Any cost at which an appraiser arrives in regards to a particular property is always individualized, based on certain factors found from the data of comparable properties and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Larimer County or Fort Collins, CO?Contact us
Myth: You can generally see what a property is worth simply by looking at the outside.
Fact: There are a number of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived simply by examining the home from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given it by their lending company.
Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the needs of their lending company.
Fact: A consumer should definitely look through their appraisal report; there may be some questions or some worries about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an report that will probably 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.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the cost of a property during a sales transaction involving a lending institution.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The point of a home inspector is to approximate the condition of the home and its major components, then write a report on their findings.