Do You Really Know What Your Home is worth?
If you're like most people, your home is your most-valuable possession. Unfortunately, if you're like most people, you don't have an accurate idea of its value.
We can help.
Since 1991, Brad Brooks & Associates has helped families throughout Colorado determine the value of their real estate. Whether you're looking to buy, sell, refinance or remodel your home or property, or you simply need to know its value for any other reason, BBA can provide you with the information you need to make wise decisions.
Below is a list of answers to frequently asked questions regarding the appraisal process:
What are appraisals and what does the appraiser do?
By definition, an appraisal is an estimation of a property's value based upon recent sales of similar properties in the immediate area. An appraiser gathers and analyzes information to develop such estimates. In Colorado, the state's Real Estate Appraisers Board licenses all appraisers, which ensures that they have been properly trained and certified.
Why should I get an appraisal?
People obtain appraisals for a number of reasons, such as:
- Buying or selling property
- Refinancing their mortgage
- Determining whether or not they have enough equity in their home to eliminate their lender's need for mortgage insurance (PMI)
- Challenge their property tax assessment
- Updating their property insurance
- Assessing whether additions or remodeling will add value to their property
- Planning their estate
- Preparing for a legal separation or divorce
Typically, if a property owner has any financial or legal matters in which the value of their property may be an issue, they should have their property appraised. One of the most common reasons for an appraisal is because a property owner wants to eliminate their need to carry mortgage insurance, which can amount to a hefty monthly charge on top of a typical mortgage payment. Most lenders will remove the mortgage insurance requirement after the property owner has accumulated enough equity in the property (typically 20%). Lenders require an appraisal by a certified appraiser to remove this requirement.
How do I find an appraiser?
Banks and mortgage lenders maintain lists of approved appraisers and can recommend one to you. Real estate agents also keep lists of appraisers they respect and trust. If you find an appraiser from another source-such as word-of-mouth, the Yellow Pages or the Internet-you should determine whether the one you have chosen has been approved by the lender you will be using. Using an appraiser that has not been approved by your lender can lead to unnecessary costs and delays.
What happens during an appraisal?
At your property, the appraiser will measure the inside and the outside of the property so that he or she can create a floor plan. You will need to provide access to all areas, including rooms, closets, attics and crawl spaces. The appraiser also will conduct research to find records for at least three recent sales of properties similar to yours in the same neighborhood or subdivision. Appraisers typically research comparable properties through the local real estate agents' multiple listing service (MLS). However, some sales (e.g., sales by owners) may only be listed in county records. Although appraisers are required to report where repairs may be needed, you should hire a professional home inspector to identify potential problems before investing in a property.
What do I need to provide?
If you are ordering an appraisal for your property, you will need to grant the appraiser with complete access to the property. If you know of any properties in the area that were sold by its owners without the assistance of a real estate agent, you should tell your appraiser because those sales will only be reported in county records instead of the real estate Multiple Listing Service (MLS). You also should give the appraiser a list of completed improvements to the property. (If you are planning to remodel, you should discuss proposed improvements with your appraiser.) Depending upon the property and comparable properties in the surrounding area, some improvements may not affect the value of your property. Such improvements may include-but are not limited to-landscaping, large decks, oversize garages, recreational vehicle parking, sheds, in-ground swimming pools, active or passive solar systems.
Where can I get additional information?
Call Brad Brooks & Associates today at 303.456.8922 or toll free outside metropolitan Denver at 888.718.9892.
