Appraisals – Common Misconceptions
Did you know that the appraisal is owned by the person or business that orders it, not the person who pays for it?
As an example, if the bank orders the appraisal they actually own it.
Did you know that the appraisal is typically done for the benefit of the lender not the buyer?
If the bank orders it, they want to know that the property appraises correctly before they loan money on a property.
Did you know that the buyer has a choice on the appraiser?
According to the OCC, the borrower can select the name of the appraiser from the list provided by the bank or financial institution.
Do you know how the County Assessors in Colorado come up with their values?
By Colorado Law, they are required to look at 18 months of data. For the 2008 valuations, they look at data from 1/1/06 to 7/15/07.
Do you know how foreclosures affect the value of appraisals in a neighborhood?
If a foreclosure is the exception in a neighborhood, an appraiser doesn’t typically include it in their comparative properties.
Have you heard an appraiser says he can’t use information from sold properties that are more than 6 months old?
Appraisers can use property information more than 6 months old, but then they are required to make price adjustments based on the market conditions.
Have you heard a Realtor say they have no control over the appraisal?
Realtors can certainly share their comparable properties with the appraiser; as well as their information on a particular neighborhood; as it may make a difference in the appraisal.
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