Appraise Colorado has answers to "Frequently Asked Questions"


	Appraise Colorado is always eager to talk to you about any concerns you might have about appraisals in Littleton and Douglas County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request services from Appraise Colorado?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, what assurance is there that the value conclusion is accurate?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Appraise Colorado get the data used to estimate values in Douglas County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Define the term "Appraisal" (Top)

The process of producing an appraisal report deals with an inspection which leads to an opinion of value. This opinion or estimate is concluded by a formal process that generally utilizes the three main "common approaches to value". One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with finding comparable houses nearby and finding value based on making a comparison of those prior sales to the house in question. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.

What does an appraiser do? (Top)

An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers illustate their conclusions in appraisal reports.

What would cause me to request services from Appraise Colorado? (Top)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight high property taxes.
If you need to take care of an estate.
To give you a negotiating tool when purchasing real estate.
To find a likely sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

Click here for a more extensive explanation of the process involved in getting an appraisal.

How is an appraisal different than a home inspection? (Top)

Home inspectors do not come to an opinion of value and do not do appraisal reports. An inspection is a third-party investigation of the available structure and appliances of a home, from the roof to the foundation. The stereotypical property inspector's report will contain an evaluation of the condition of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (Top)

Frankly, it's like comparing broadband and dial-up. What the CMA depends on are superficial trends. The appraisal is reliant on specific valid comparable sales. The appraisal report will also include area and building costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is hands down the most significant difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, Colorado licensed professional who has formed a career on valuing homes in and around Douglas County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for assignments, regardless of their value conclusion.

What does the appraisal report contain? (Top)

Each appraisal should reflect a believable value opinion and must clearly state the following:

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The purpose of the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered to complete the job.

For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value conclusion is accurate? (Top)

In communicating an appraisal report, each appraiser must make sure of the following:

The appraisal used an appropriate analysis of the data.

Whether individually or collectively, there were no critical errors contained in the report, nor any material details left out.

That appraisal services were delivered in a careful and judicious fashion.

The final appraisal report was transparent, credible and conclusive.

There are rigorous education and on the job experience requirements that must be met in order to become a licensed appraiser in Colorado. Plus, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification requires classroom study, tests and real world experience. Once licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (Top)

Typically, appraisers are employed by lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Appraise Colorado get the data used to estimate values in Douglas County or other areas? (Top)

Compiling information is one of the main things an appraiser performs. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is received from a numerous places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

What can a full appraisal do for me? (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Appraise Colorado is the best way to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Top)

PMI is short for for Private Mortgage Insurance. It takes care of the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than the balance of the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The savings from getting rid of your PMI pays for the appraisal in no time. Appraise Colorado has years of experience with real estate value trends in Littleton and Douglas County. Contact us today.

How do I get ready for the appraiser? (Top)

We begin with an inspection of the property. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Records on the latest purchase of the property in the last three years.
List of personal property to be sold with the building.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value" (Top)

In real estate appraising, Market Value is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Does the appraisal belong to the bank or the consumer? (Top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Top)

It really depends on the market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

No matter where you go, however, renovating a kitchen is almost always a safe move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.