Welcome, this week I’m discussing what is an appraisal. I’m Bob Gordon Realtor Berkshire Hathaway HomeServices Boulder.
My goal with this video series: inform first time home buyers about the process involved and all the lingo we use in this industry.
What Is An Appraisal?
This is the process of determining, in an unbiased opinion, the value of real property. This report could simply be oral, the completion of a pre-printed form or a lengthy original written report.
Three Types of Appraisals
The Cost Approach examines the replacement cost of a structure, less depreciation plus the value of the land. This is a common Boulder appraisal for churches and post offices in addition to new construction.
The Direct Sales comparison or Market data comparative analysis is most commonly employed by Realtors.
It is the process of looking at recent similar home sales and deriving a value. Factors such as seller concessions, buyer financing alternatives, time and differences between one Boulder home and the next impact the valuation.
The income approach is ideal for valuing income investment opportunities such as office buildings, apartments and shopping centers. This value is based upon the capitalization of net income.
Video By Bob Gordon BHHS Realtor
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What is an appraisal Video Description
Hey guys, I’m Bob Gordon Realtor Berkshire Hathaway HomeServices and I wanted to talk to you today about appraisals.
The appraisal is an unbiased professional opinion on the value of your home. An appraisal will look at many factors when looking at a property.
Factors such as the number of bedrooms and bathrooms or the quality of the interior finish. Finished basements and the size of the property lot impact value as well.
Appraisals Are Not (always) Required
Believe it or not, in some instances a home buyer will forgo an appraisal. Cash home purchasers frequently do not get an appraisal.
In competitive Sellers’ Markets, such as the one Colorado has been experiencing from 2012 to 2018 home buyers will forego the appraisal or agree to bring the shortfall if the valuation does not come in for full price.
And on occasion, a Home Buyer’s mortgage lender will be granted an appraisal waiver through the automated Desktop Underwriting system.
Similar but different:
- An assessment, usually performed by a government agency to determine the property tax rate.
- A market analysis, done by Realtors such as Bob Gordon at Berkshire Hathaway to assist home selling clients in correctly pricing your home for the market.
Residential appraisers are independent and licensed. The appraisal is ordered by the bank to ensure the value that home is being loaned upon makes sense from a financial perspective to protect everyone’s investment.
About Bob Gordon Berkshire Hathway HomeServices
Bob has been blogging on all things Boulder and real estate since 2012. When not assisting clients he is an avid hiker (Colorado summers) and skier (winter!).
Also passionate about cooking nice meals – usually from cookbooks. At the time of this writing, a little obsessed with America’s Test Kitchen Best of Mexico! Let’s grab a bit and talk about your real estate needs.