Your Beginner’s Guide to Home Appraisals

 

Appraisals are used as a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper. Designed to protect buyers, sellers, and lending institutions, appraisals are an important part of the buying/selling process.

Below, you will find information about the appraisal process, what goes into them, their benefits and some tips on how to help make an appraisal go smoothly and efficiently.

 

Appraisal value vs. market value

The appraiser’s value is determined by using a combination of factors such as comparative market analyses and their inspection of the property to determine if the listing price is typical for the area.

Market value, on the other hand, is what a buyer is willing to pay for a home or what homes of comparable value are selling for.

If you are in the process of setting the price of your home, you can gain some peace-of-mind by consulting an independent appraiser. Show them comparative values for your neighborhood, relevant documents, and give them a tour of your home, just as you would show it to a prospective buyer.

 

What information goes into an appraisal?

Professional appraisers consult a range of information sources, including multiple listing services, county tax assessor records, county courthouse records, and appraisal data records, in addition to talking to local real estate professionals.

They also conduct an inspection. Typically, an appraiser’s inspection focuses on:

  • The condition of the property and home, inside and out.
  • The home’s layout and features.
  • Home updates.
  • Overall quality of construction.
  • Estimate of the home’s square footage (the gross living area “GLA”; garages and unfinished basements are estimated separately).
  • Permanent fixtures (for example, in-ground pools, as opposed to above-ground pools).

After the inspection, the appraiser of a typical single-family home will create their report including their professional opinion on what the price of the home should be.

You might hear the lender ask for two reports, the “Sales Comparison Approach” and the “Cost Approach.” These two approaches use different methodologies to find the appropriate value of the home, and help the lender confirm the home’s price.

 

Who pays and how long does it take?

The buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $275-$600, but this can vary from region to region.

An inspection usually takes anywhere from 15 minutes to several hours, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for the values of the houses around you. A full report is sent to your loan officer, real estate agent, and/or lender in about a week.

If you are the seller, you won’t get a copy of an appraisal ordered by a buyer. Under the Equal Credit Opportunity Act, however, the buyer has the right to get a copy of the appraisal if they request it. Typically, the requested appraisal is provided at closing.

 

What if the appraisal is too low?

A low appraisal can present a problem when there’s a large difference between what you’ve agreed to pay and the appraisal price.

Usually, the seller’s agents and the buyer’s agent will respond by looking for recent sold and pending listings of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can re-negotiate the contract or cancel it.

 

Where do you find a qualified appraiser?

Your bank or lending institution will find and hire an appraiser; Federal regulatory guidelines do not allow borrowers to order and provide an appraisal to a bank for lending purposes. If you want an appraisal for your own personal reasons and not to secure a mortgage or buy a homeowner’s insurance policy, you can do the hiring yourself. You can contact your lending institution and they can recommend qualified appraisers and you can choose one yourself or you can call your local Windermere Real Estate agent and they can make a recommendation for you. Once you have the name of some appraisers you can verify their status on the Federal Appraisal Subcommittee website.

 

Tips for hassle-free appraisals:

To ensure the appraisal process is smooth and efficient, provide your appraiser with the information and documents he or she needs to get the job done. The documents you will need include:

  • A brief explanation of why you’re getting an appraisal
  • The date you’d like your appraisal to be completed
  • A copy of your deed, survey, purchase agreement, or other papers that pertain to the property
  • A sketch of the property with the property’s dimensions. These are usually available online from the county assessors.
  • If you have a mortgage, provide the information about your lender, the year you got your mortgage, the amount, the type of mortgage (FHA, VA, etc.), your interest rate, and any additional financing you have.
  • A copy of your current real estate tax bill, statement of special assessments, balance owing and on what (for example, sewer, water)
  • Tell your appraiser if your property is listed for sale and if so, your asking price and listing agency.
  • If it’s a multiple offer situation, provide the appraiser with the other offers to prove the demand for the home.
  • Any personal property that is included in the sale, like appliances and other fixtures.
  • If you’re selling an income-producing property, a breakdown of income and expenses for the last year or two and a copy of leases.
  • A copy of the original house plans and specifications.
  • A list of recent improvements and their costs.
  • Any other information you feel may be relevant.

By doing your homework, compiling the information your appraiser needs, and providing it at the beginning of the process, you can minimize unnecessary delays.

Posted on October 23, 2019 at 4:18 pm
Fort Collins | Category: Blog, Buyers, Economy, Sellers | Tagged , , , , , , , , , , , , , , , , , , , , , , , ,

Amazing and Rare Horse Property in Fort Collins!

10257 N County Rd 17 has many outbuildings, horse facilities, views, and a cute updated home. Horse features include 10 stalls, 8 loafing sheds, 15 auto waterers (in pastures & runs), outdoor arena, foaling stall, 1560 sq ft hay barn, turn-out traps & pasture. Outbuildings – 36′ x 45′ greenhouse with lights, 1500 sq ft pole barn/garage with 454 sq ft loft. Home has been updated over the years and features an office, patio off of the master, and a sun-room. Contact Meagan Griesel for your private showing at (970) 691-0056 for more information or click the link below for more details.

http://windermerenoco.com/listing/94767006

Posted on April 30, 2019 at 3:17 pm
Fort Collins | Category: Fort Collins Real Estate, Virtual Tours | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , ,

52.8 Acres of Land in Fort Collins!

With endless mountain views at 6015 S Timberline Rd .  This underdeveloped site is an incredible investment/development opportunity. Located in a prime location in Fort Collins, it is currently zoned FA1. Surrounding properties have been rezoned to LMN, with all multifamily development. Backs to Southridge golf course. No showings of the house until under contract. Also available for purchase at market value are 10 shares of CBT and 1 share of New Mercer Ditch. $500K of water rights. Call Kyle Basnar for more information at 970-481-5689 or click the link below for more details.

http://windermerenoco.com/listing/77374327

 

Posted on April 10, 2018 at 3:57 pm
Fort Collins | Category: Colorado Real Estate, Fort Collins Real Estate | Tagged , , , , , , , , ,

Beautiful Ranch Style Home on .3 Acres

This impeccably cared for home 7407 Rosecroft Dr situated on .3 acres with a fenced yard in Belmont Ridge awaits. The gorgeous 4 bedroom, 3 bathroom ranch home features a Great room with a vaulted ceiling, a formal dining room, breakfast nook and 3 car garage. The master retreat showcases a double sided fireplace, adjoining a 5 piece master bathroom, with a beautifully finished river rock shower. Entertain friends and family in the finished basement which is plumbed for a wet bar. This home is better than NEW! Call Rondi duPont for a private showing or click the link below for more details.

http://windermerenoco.com/listing/77260459

Posted on April 6, 2018 at 4:56 pm
Fort Collins | Category: Virtual Tours, Windsor Real Estate | Tagged , , , , , , , ,

The Mountain Market

With fall right around the corner many of us will be trekking up to Estes Park to see the Aspen leaves turning.

As you drive through Estes you may wonder “how’s the mountain market?”

Here are some fun facts about real estate in Estes Park.

  • The average price today is $394,046 – not that different than Fort Collins.
  • Average prices have gone up $60,000 in the last three years.
  • Their market has about 300 sales per year- roughly a tenth of the amount in Fort Collins.
  • If you were looking for a home in Estes between $300,000 and $500,000, you would have 15 to choose from.

Now you know about the Mountain Market!

mountain-1244132_1920

 

 

Posted on August 12, 2016 at 3:54 pm
Fort Collins | Category: Blog, Fun Facts | Tagged , , , , , , , , , , , , , , , ,

Door Opens for Buyers

After a very active (to say the least) spring and summer, the door has now opened for buyers in our market.

Sell Your Home With EaseBuyers who were frustrated during the first half of the year with low inventory and bidding wars now realize a better environment. It’s time to step off the sidelines and take a fresh look at what the market has to offer.

The first piece of good news is that rates have dropped to near all-time lows. Rates today are 0.6% lower than they were on January 1st. What this means on a $400,000 home with a conventional loan is a monthly savings of $110!

The second piece of good news is that inventory levels are coming up. There are more homes on the market to pick from and lower demand because of seasonal slowing. Months of inventory in Larimer County markets have bounced up 20% to 33%.

 

 

 

Posted on August 5, 2016 at 8:45 am
Fort Collins | Category: Blog, Fun Facts, Mortgage | Tagged , , , , , , , , , , , , , , , ,

Seasonal Slowdown

August marks the end of the busy real estate selling season and the beginning of the traditional seasonal slowdown in our market.car-768711_640

The four months of April, May, June and July tend to produce 45% of the year's total sales. This is based on looking back at 5 years of data.

If 2016 holds true to form, the next five months from now until the end of the year will be progressively slower.

No surprise that December tends to be the slowest month with a third of the number of sales compared to a typical July.

Here's what we will be watching closely over the next few months – is this year's seasonal slowdown "normal", or, because the market has been so hot this year, is it breaking traditional trends.

We will be sure to keep you informed!

 

 

 

Posted on July 29, 2016 at 3:04 pm
Fort Collins | Category: Blog, Fun Facts | Tagged , , , , , , , , , , , , , , , ,

Mis-Match

Our market is under-supplied. Plain and simple. There is a 1 to 2-month supply of homes across Northern Colorado. A balanced market would have 6 months.

So, home builders to the rescue right? Not so fast. Home builders, for various reasons, have a very hard time matching the market.

75% of sales in Northern Colorado are below $400,000. Only 16% of new home inventory in Northern Colorado is below $400,000. That is a mismatch.

Builders are faced with high land costs, high materials cost, high labor costs, high permitting costs and high water costs. It’s pretty much impossible, in most parts of our market, to deliver a new home under $400,000.

So, condominiums to the rescue right? Not so fast. Because of onerous construction defect laws, developers do not want to build multi-family, for sale product. It’s too risky. They’d rather build apartments.

Our market is under-supplied. Plain and simple.

This is really good news if you are a seller who wants to move up. This is especially good news if you are a seller of a condominium.

Contact us to find out what our under-supplied market has done to the value of your home. We’ll put together an Equity Snapshot which will show you, in detail, what your home is worth in today’s market. It’s valuable information to have whether you are thinking of selling or not. Just call 970-460-3033 or e-mail us at fortcollins@windermere.com.

 

houses-691586 - Copy - Copy

 

 

Posted on July 15, 2016 at 8:21 am
Fort Collins | Category: Blog, Fun Facts | Tagged , , , , , , , , , , , , , , , ,