Partner Appraisal Services
Important: We receive no referral fees from any of our Partner Service Providers, nor are we otherwise compensated in any way. The advantage our Partners provide is access to their services for a lower cost than our customers are likely to find elsewhere. As always, our customers are under no obligation to contract the services from any of our Partner Service Providers. We simply offer the opportunity for those who wish to take advantage of it.
Partner Appraisal Services
An appraisal of a home is an estimation of the value of the home, which has two main determinants. The value of a property equals the value of the land plus the cost of building the existing home (in today’s dollars), minus any depreciation in the quality of the home from a variety of causes. Sources of depreciation are present in all homes and include a variety of things such as a damaged roof or an obsolete (in terms of function) heating system. The appraiser may combine this data with a variety of other indicators of value, such as local market trends, the location of the property itself, sales of comparable properties and extensive research of the property and its history using a variety of sources. Appraisers use professional knowledge to arrive at what is ultimately an objective opinion as to the value of the property. They take numerous variables into account to arrive at this opinion, so it is essential that the appraiser be well-qualified and experienced in order to receive the most accurate appraisal possible.
There are two instances in which it is helpful or necessary to conduct an appraisal of a home that is for sale or about to be purchased. An appraisal may be done by a buyer or a seller. The seller can have an appraisal conducted prior to placing his or her home on the market, and for the same reason may wish to have an inspection performed as well. An appraisal helps guide the seller in setting an asking price, and can be both a good selling point as well as a good way to reduce the probability of negotiation taking place. If the seller has not done so, a buyer may wish to hire an appraiser before deciding to buy the home at the asking price or before submitting an offer. This requires the permission of the seller, though. It is not required that either the buyer or the seller conduct an appraisal at this time.
However, the second instance in which an appraisal can be conducted is necessary. Mortgage lenders require an appraisal prior to approving a mortgage on a given property to ensure that the amount of money they are lending is similar to the appraised value of the home the borrower wishes to purchase. Unfortunately, an appraisal hired beforehand by a buyer or a seller cannot take the place of the one required by the mortgage lender, as federal law stipulates that the lender must have first contact with the appraiser they will hire
Appraisal reports are quite detailed and the cost of an appraisal reflects the amount of work that goes into it. According to the Appraisal Institute’s website, the Uniform Standards of Professional Appraisal Practice (USPAP) specifies that the following be included in any appraisal report:
- The identity of the client and any other intended users
- The intended use of the report
- The type and definition of the value to be estimated
- The effective date of the appraisal
- The real estate being appraised
- The real property interest being valued
- Any extraordinary assumptions and hypothetical conditions affecting the appraisal
- The scope of work- i.e. the extend of the process of collecting, confirming and reporting data
- Any usual valuation approaches that may have been excluded
- The highest and best use of the real estate when such an opinion is necessary and appropriate
- The information considered, appraisal procedures followed and reasoning applied
- A signed certification in accordance with USPAP Standards Rule 2-3”
According to the National Association of Independent Fee Appraisers (NAIFA), the person having the appraisal done should be able to answer these questions or have the specified documents available so that the appraiser can do his or her job quickly and arrive at an appraisal that is an accurate reflection of the true value of the property.
- The purpose of the appraisal
- The required completion date of the appraisal
- A copy of deed, survey, purchase agreement or other papers pertaining to the property
- Is there a mortgage? If so, with whom, when placed, for how much, what type (FHA, VA etc.), at what interest rate and any other types of financing if applicable
- Is there a mortgage? If so, with whom, when placed, for how much, what type (FHA, VA etc.), at what interest rate and any other types of financing if applicable.
- Whether the property is listed for sale and if so, for how much and with whom?
- Any personal property included in the sale, if applicable
In the case of our partner appraisal firms, it is important that you know the qualifications of the individual appraiser who will be sent to conduct your appraisal. Qualifications of our independent partner appraisers are listed below. In order to make an educated decision regarding what qualifications you will require, we recommend that you read through the information contained in the web sites of the professional appraisal societies that we have mentioned. They offer guidance for choosing the right appraiser, and what questions to ask before hiring one.
Links to a few professional real estate appraisal organizations are listed below. All claim that their members are held to standards higher than those of any government regulation. You can find their individual Codes of Ethics on their websites if you like. All abide by the Appraisal Foundation’s USPAP, but they differ in specifics. On average, these organizations require their members to have been appraisers for several years and to have conducted a certain number of home inspections before qualifying for membership. In addition, some organizations, such as the NAIFA, have different levels of membership that reflect different qualifications.
Professional Appraisal Societies and Appraisal Information:
National Association of Independent Fee Appraisers (NAIFA)
Appraisal Institute (AI)
American Society of Appraisers (ASA)
Appraisal Foundation (The authors of the USPAP)
We are in the process of interviewing partner appraisal services in order to have several distributed throughout the Metro Denver area, so there are services available near all our customers.
Erin Trost
the Appraisal Connection
E-Mail: erin@appraisal-connection.com
