Common myths about appraising

It is enforced by law that an appraiser is required to be state-licensed to create appraisal reports for federally-supported real estate transactions in Colorado. The law entitles you to acquire 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: Assessed value will always be similar to to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.

Myth: The appraised value of a house will change depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Any time market value is established, it should be similar to the replacement cost of the home.

Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount needed to reconstruct a property is what forms the replacement cost.

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

Fact: An appraisal is an assertion of data concluded from the house's size, location, proximity to undesirable facilities, the condition of the property and the worth of recent comparable sales. You can count on Mountain Ridge Appraising's appraisers to be ethical in assessing this data.

Myth: As homes appreciate by a certain percentage - in a strong economic state - the properties in proximity are expected to appreciate by the same amount.

Fact: Worth appreciation of a certain home is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. This is true in excellent economic times as well as poor.

Myth: Just seeing what the house looks like on the outside gives an idea of its value.

Fact: There are a number of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at the house from the outside.

Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their house, they own their appraisal report.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the report. Home buyers must be supplied with a version of the report upon written request as per the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the requirements of their lending company.

Fact: Only if home buyers read a copy of their appraisal report 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. Also, the report makes a near perfect 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 proximity.