Real estate appraisal, property valuation or land valuation is the process of developing an opinion of value, for real property (usually market value). Real estate transactions often require appraisals because they occur infrequently and every property is unique. The location also plays a key role in valuation. Since property cannot change location, it is often the upgrades or improvements to the home that can change its value. Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report is used to establish a sale price for a property.
In the state of Colorado appraisers can be either licensed, certified or Certified General. A licensed appraiser must complete 1000 hours of on the job training and 150 hours of coursework. They also must have completed the equivalent of a associates degree. A certified appraiser must complete 1500 hours of on the job training and 200 hours of coursework, as well as possess a Bachelor’s degree or required qualifying college classes. Both levels must pass a state exam and complete continuing education on an annual basis. Certified General is required to complete Apartments/Commercial work.
A home is a large investment and any financial decision made should be based off of an educated opinion and completion of a residential appraisal. You are making a decision on a investment valued at $100,000 or more. The fee you pay for an appraisal can save you from making a costly mistake when valuing your home. Insuring you make a good financial decision on such a large investment decision only makes since.
During an appraisal the appraiser will measure the exterior walls of the home and record the measurements on a sketch. To complete this they need a clear path around the exterior of the property. They will also be photographing all sides of the property while measuring. Once the exterior is measured and photographed the appraiser will enter the property to inspect the interior. During this process the appraiser will photograph all rooms and label the rooms on the sketch. The appraiser will need to access all rooms on the property including the garage, basement, attic, crawl space areas and be able to clearly see all walls. floor area, ceilings, and closets. If you have completed any updates and remodeling, it is helpful to have a list of these items available to the appraiser at or before your inspection.
This is the value a home would sell for on the open market, within a specified time frame. A value stated as an opinion, as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser and client as applicable in an appraisal.
The party that orders the appraisal is the owner. For example, a bank is a common party that orders an appraisal. The bank wants to know that the property is worth the amount of money being borrowed. Since the property is commonly used as collateral to secure the loan. Then the bank passes the cost of the appraisal on to the property owner in the form of fees for the loan.