Appraisal myths & facts
It is required by legal agencies that an appraiser must be state-licensed to produce appraisal reports for federally-supported real estate purchases in Colorado. You are also entitled by law to receive a copy of the finished report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value should always equate to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. At times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the Fort Collins have not been reassessed for a good length of time, it may vary wildly.
Myth: The opinion of value of a home will change depending upon if the appraisal is provided for the buyer or the seller.
Fact: The opinion of value of the property does not affect the pay of the appraiser; due to this, the appraiser has no preconceived interest in the opinion of value of the house. What this means is he will provide business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the property were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: There are specific methods that real estate appraisers use to show the cost of a property, like the price per square foot.
Fact: An appraisal is an assertion of information concluded from the house's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can count on Robert L Ripp, SRA's appraisers to be ethical in assessing this data.
Myth: As houses appreciate by a specific percentage - in a strong economic state - the homes in proximity are figured to appreciate by the same amount.
Fact: Value appreciation of a specific home must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Larimer County or Fort Collins, CO?Contact Robert L Ripp, SRA
Myth: You can often tell what a house is worth simply by looking at the outside.
Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just inspecting the home from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they legally own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. However, consumers have to be supplied with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their document so long as it exceeds the necessities of their lending group.
Fact: Only if home buyers look at 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. An appraisal can double as a record for the future, containing a great deal of 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 estimate of the cost of a property during a sales transaction involving a lending company.
Fact: Hiring an appraiser 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: An appraisal is no different than a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The task of the appraiser is to come to 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 house and its major components, then compose a report on these inspection.