Just Appraisals has answers to "Frequently Asked Questions"


	Just Appraisals is always prepared to handle any concerns you might have about appraisals in El Paso County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons someone would need your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the report has been completed, how can I have assurance that the value indicated is valid?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in El Paso County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (List of questions)

The procedure of creating an appraisal report consists of an inspection which forms an opinion of value. The real estate appraiser will use a several "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves figuring what the improvements would cost minus physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a residential property. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (List of questions)

An appraiser provides a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers summarize their findings in appraisal reports.

What are the reasons someone would need your services? (List of questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:

If you are applying for a loan.
To reduce your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To challenge high property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out a reasonable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more extensive explanation of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (List of questions)

Home inspectors do not produce an opinion of value and are not appraisers. An inspection is a third-party evaluation of the livable structure and mechanical systems of a home, from the top to the bottom. Commonly, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, 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 other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

Frankly, it's like comparing Shakespeare to reality TV. What the CMA depends on are ill-defined trends. The appraisal depends on specific verifiable comparable sales. The appraisal report will also contain neighborhood and construction prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who has formed a career on valuing properties in and around El Paso County creates the appraisal. Further, the appraiser is an independent voice, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

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

Each appraisal must reflect a credible value opinion and should document the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights 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 items.
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 comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, how can I have assurance that the value indicated is valid? (List of questions)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was appropriate.

That grave errors of omission or commission were not committed individually or collectively.

That appraisal services were rendered in a careful and cognizant manner.

The final appraisal report was transparent, credible and defensible.

There are rigorous classroom and practical experience requirements that must be satisfied 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 communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification is achieved through coursework, tests and real world experience. Once licensed, he/she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Most of the time, appraisers are employed by lenders to estimate the value of property involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

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

Compiling information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is collected from a numerous sources. To research recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely 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 product.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me? (List of questions)

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 house, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Just Appraisals is the best documentation to ensure assets are divided 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? (List of questions)

PMI is short for for Private Mortgage Insurance. This additional policy protects the lender if a borrower is unable to pay on the loan and the value of the house is lower than what is owed on 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 amount you keep from dropping your PMI will make up for the price of the appraisal in no time. Just Appraisals is a name you can trust when it comes to real estate value trends in Colorado Springs and El Paso County. Contact us today.

How do I get ready for the appraiser? (List of questions)

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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.

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

Information on any written private easements, such as a shared driveway with a neighbor.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
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 entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not entitled 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 cases, the appraiser may state the purpose of the appraisal; 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.

Are some home improvements more worthwhile than others? (List of questions)

The added value of a particular amenity truly depends on the local market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, something that may not increase your value would be painting just for the sake of redecorating.