Accurate Valuation LLC has answers to "Frequently Asked Questions"


	Accurate Valuation LLC is ready to talk to you about any inquiries you might have about appraisals in Wellington and Larimer County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
Why would I request a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the assignment has been delivered, how can I have confidence that the final number is trustworthy?
How are appraisers certified?
Who employs appraisers?
Where does Accurate Valuation LLC get the information used to estimate values in Larimer County or other areas?
How can a licensed appraiser help me?
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
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

What is an appraisal? (Top)

An appraisal is a thought process allowing the appraiser to come 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 the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the home, less the depreciation and physical dilapidation, adding the land value. The Sales Comparison Approach deals with searching for comparable houses in the vicinity and discerning value based on making a comparison of those houses to the house in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of 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.

What does an appraiser do? (Top)

An appraiser offers an unprejudiced and well justified assessment of market value, to be used in making real estate transactions. Appraisers show their professional analysis in appraisal reports.

Why would I request a real estate appraisal? (Top)

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

To receive a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove insurance.
To fight high property taxes.
To settle an estate.
To offer you an edge when purchasing a home.
To find the most probable property value when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every house.
If you are ever involved in a lawsuit.

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

Is an appraisal the same as a home inspection? (Top)

Appraisers do not do provide residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the house from bottom to rooftop. Generally, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Honestly, they have nothing in common. The CMA depends on indistinct trends in the market. The appraisal depends on specific verifiable comparable sales. Area and construction values are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Colorado licensed professional who made a career on valuing properties in and around Larimer County is behind 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 accept a flat sum for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (Top)

Every report must demonstrate a supported value opinion and will clearly state the following:

The client and other intended users.
How the appraisal is supposed to be used.
The reason for the appraisal.
The type of value contained and a definition of that value.
The effective date of the appraisal.
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, 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.
What was involved in the activity of completing the appraisal.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, how can I have confidence that the final number is trustworthy? (Top)

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

That the information analysis utilized in the appraisal was appropriate.

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

That appraisal services were provided in a careful and cognizant fashion.

The final appraisal report was easy to explain, credible and not easily discredited.

To become a state licensed appraiser, there are education requirements as well as practical experience that must be attained - all with the objective of being able to render unbiased value opinions. In addition, appraisers must obey a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification is achieved through coursework, tests and practical experience. Once an appraiser is licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (Top)

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

Where does Accurate Valuation LLC get the information used to estimate values in Larimer County or other areas? (Top)

One of the main tasks an appraiser engages in is to gather data. Data can be divided into Specific or General. Specific data is 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 many sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Top)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Accurate Valuation LLC is the best documentation 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.

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

PMI is short for for Private Mortgage Insurance. It protects the lender in case a borrower doesn't pay on the loan and the market price of the home is lower than the balance of the loan. 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.


	The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Accurate Valuation LLC when it comes to analyzing real estate appreciation in Wellington and Larimer County. Contact us today.

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

The first step in most appraisals is the property inspection. During this process, the appraiser 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. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A plot plan or survey of the house and land (if readily available).
Written property agreements, such as a maintenance agreement for a shared driveway.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or 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. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the report - 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (Top)

The answer to this is different depending upon the location of the home. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the best ROI from renovating a home comes in the kitchen. 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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.