Metro Mountain Appraisers Inc. has answers to "Frequently Asked Questions"


	Metro Mountain Appraisers Inc. is prepared to handle any concerns you might have about appraisals in Arapahoe County. Contact us today to see how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to require services from Metro Mountain Appraisers Inc.?
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?
After completing the report, how can I have confidence that the final number is accurate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does Metro Mountain Appraisers Inc. get the information used to estimate values in Arapahoe 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?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Top)

The process of writing an appraisal report deals with an evaluation which forms an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a house; it involves concluding what the improvements would cost minus physical deterioration, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most popular approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. One of the least common approaches in appraising homes is the Income Approach, which is generally used to find the market value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do? (Top)

An appraiser generates a fair and credible determination of market value, in the support of real property exchanges. Appraisers document their expert conclusions in appraisal reports.

What would cause me to require services from Metro Mountain Appraisers Inc.? (Top)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an report include:

To obtain a loan.
To reduce your property taxes.
To build a case for a homeowner's equity and remove insurance.
To contest high property taxes.
To handle an estate.
To provide you an edge when purchasing a home.
To find a reasonable sales price when selling your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every house.
It's possible you could be involved in a lawsuit - an appraisal will help.

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

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

Home inspectors do not produce an opinion of value and do not do appraisal reports. A third-party home inspector will judge the structure of the house, from the roof to the bottom. Usually, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Simply, they share nothing in common. The CMA utilizes market trends to create most of their business. Appraisals use similar sales which are verifiable resources. Location and construction costs are also important in an appraisal. 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 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, state licensed professional who made a career on valuing real estate in and around Arapahoe County is behind the appraisal. Further, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.

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

Every report must reflect a supported estimate of value and must identify the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the value opinion.(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 description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used when completing the assignment.

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

After completing the report, how can I have confidence that the final number is accurate? (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained a suitable analysis of the information.

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

That appraisal services were done in a careful and judicious manner.

The final appraisal report was understandable, legitimate and not easily discredited.

To become a state licensed appraiser, we must fulfill considerable education and experience requirements that enable us to formulate an unbiased opinion. In addition, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification requires coursework, tests and practical experience. Once licensed, he or she must then engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Top)

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

Where does Metro Mountain Appraisers Inc. get the information used to estimate values in Arapahoe County or other areas? (Top)

One of the most important things an appraiser does is to compile data. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is gathered from a variety of places. To look up recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Appraisers often have 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 service.

And most importantly, 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? (Top)

An appraisal is a worthwhile whenever the value of your home is relevant to a financial decision. If you're selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Metro Mountain Appraisers Inc. is the best way to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental policy protects the lender if a borrower defaults on the loan and the market price of the property is lower than what the borrower still owes on 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.


	Did you have less than 20% to put down on your mortgage? Call Metro Mountain Appraisers Inc. today at 3033395900. You may be able to save money by removing your Private Mortgage Insurance payment.

Do you need anything from the homeowner in advance? (Top)

The first step in most appraisals is the property 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 amenities. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

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

Any information on the purchase of the property for the last three years.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (Top)

In real estate appraising, Market Value (as opposed to Fair 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? (Top)

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 included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may stipulate how the appraisal can be used; 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.

Which home renovations add the most to the price? (Top)

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 weren't far behind, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.