Colorado West Appraisals has answers to "Frequently Asked Questions"


	Colorado West Appraisals is always ready to address any questions you might have about appraisals in Delta County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would a person need a real estate appraisal?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the appraisal has been completed, how can I have a guarantee that the value conclusion is trustworthy?
How are appraisers certified?
Who hires Colorado West Appraisals
Where does an appraiser get the data used to estimate values in Delta County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (List of questions)

The appraisal process is an estimation that leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the age and physical dilapidation, adding the land value. Easily the most common approach in finding the value of a house is the Sales Comparison Approach which deals with figuring a comparison to similar houses nearby. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a house. The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

Describe what an appraiser does (List of questions)

An appraiser provides a fair and credible determination of market value, often in the context of a real estate purchase. Appraisers demonstrate their conclusions in appraisal reports.

Why would a person need a real estate appraisal? (List of questions)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:

To receive a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove PMI.
To challenge inflated property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To find an honest price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a civil case.

If you need more information about the appraisal process, please click here.

How is an appraisal different than a home inspection? (List of questions)

The appraiser is not a home inspector and does not do a complete home inspection. A third-party home inspector will judge the structure of the house, from the roof to the foundation. The stereotypical house inspector's report will contain an evaluation of the integrity of the home's heating systems, 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.

My agent performed a CMA for me. Is that the same as an appraisal? (List of questions)

Honestly, they share nothing in common. The CMA uses market trends to create most of their business. An appraisal is based on comparable sales that can be proven by records. In addition, the appraisal looks at other factors like condition, neighborhood and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person doing the report. 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 real estate in and around Delta County is behind the appraisal. Moreover, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report? (List of questions)

The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used while working up the assignment.

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

Once the appraisal has been completed, how can I have a guarantee that the value conclusion is trustworthy? (List of questions)

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

The appraisal contained an apropos 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 not conducted in a careless or negligent manner.

The final appraisal report was transparent, sound and defensible.

To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to formulate an unbiased opinion. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires coursework, tests and experience working under a supervisor. Once licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Colorado West Appraisals (List of questions)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Delta County or other areas? (List of questions)

One of the main activities of an appraiser is to assimilate data. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To verify actual sales prices, we use tax records and other public documents. Appraisers often need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (List of questions)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)

PMI is an acronym for Private Mortgage Insurance. This supplementary policy takes care of the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	Is PMI something increasing your monthly mortgage payment?Call Colorado West Appraisals today at 9708722279 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal inspection (List of questions)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

Records on the latest purchase of the property in the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements if the property is to be appraised "as complete".

What is "Market Value?" (List of questions)

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."

Who has rights to the appraisal report? (List of questions)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled 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 engages an appraiser directly. In these scenarios, the appraiser may state 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? (List of questions)

Like all things real estate, this is dependent on a home's location. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe investment. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms are right up there with kitchens, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.