Common myths about appraising

It is mandated by the government that a real estate appraiser needs to be state-licensed to create appraisals for federally-supported property purchases in Colorado. Also by law, you are entitled to demand a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser will be equivalent to the market value.

Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby homes are prime examples of why this occurs.

Myth: The buyer or the seller often will have impact in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraised value of the property does not affect the payment of the appraiser; because of this, the appraiser has no pressured interest in the cost of the house. Obviously, he will provide task with impartiality and independence regardless for whom the appraisal is created.

Myth: The replacement cost of the home will be is on par with the market value.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under pressure from any outside party to purchase or sell. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.

Myth: There are certain ways that appraisers use to find the value of a property, such as the price per square foot.

Fact: Appraisers make a comprehensive analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.

Myth: In a strong economy - when the costs of homes in a given area are found to be increasing by a particular percentage - the values of individual homes in the proximity can be expected to increase by that same percentage.

Fact: Any worth at which an appraiser concludes in regards to a specific home is always individualized, based on certain factors derived from the information of comparable houses and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: The house's outside is determinate of the actual value of the home; there is no need to do an interior appraisal.

Fact: House worth is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data needed.

Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance real estate, you own the ordered appraisal report.

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even concern themselves with what the report contains so long as their lender is satisfied.

Fact: Only if home buyers examine a copy of their appraisal 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. There is a wealth of information contained in an report that could be useful to the home buyer 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.