Andrew Hyatt has answers to "Frequently Asked Questions"


	Andrew Hyatt is ready to talk to you about any questions you might have about appraisals in Denver and Denver County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to require a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, what guarantee is there that the value indicated is veritable?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Denver County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (Top)

The appraisal process is an estimation that produces an opinion of value. This opinion or estimate is concluded using a formal method that commonly uses three "common approaches to value". One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the property, minus depreciation and physical deterioration, plus the land value. The most common approach in figuring the value of a house is the Sales Comparison Approach which involves figuring a comparison to similar homes close by. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

What does an appraiser do? (Top)

An appraiser generates a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers show their professional conclusions in appraisal reports.

What would cause me to require a real estate appraisal? (Top)

There are many reasons to obtain an appraisal from Andrew Hyatt with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:

To receive a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To fight inflated property taxes.
If you need to take care of an estate.
To provide you an edge when purchasing a home.
To determine an honest property value when putting your home on the market.
To protect 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 have to deal with being in a lawsuit - an appraisal will help.

Click here for a more detailed explanation of the process involved in getting an appraisal.

How is an appraiser different than a home inspector? (Top)

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the home from bottom to top. The standard house inspector's report will include an evaluation of the integrity of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

To be honest, they have nothing in common. The CMA relies on indistinct trends in the market. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain neighborhood and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person behind the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Colorado licensed professional who bases a career on valuing properties in and around Denver County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for work they perform, regardless of their outcome.

What can I expect to see in my appraisal report? (Top)

Each appraisal must demonstrate a credible estimate of value and should document the following:

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
What was involved in the process of completing the appraisal.

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

Upon completion of the appraisal, what guarantee is there that the value indicated is veritable? (Top)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was proper.

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

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

The final appraisal report was clear, sound and conclusive.

To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be logged - all with the objective of being able to provide unbiased value opinions. Likewise, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification requires classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (Top)

Mortgage lenders are an appraiser's most likely client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Denver County or other areas? (Top)

One of the most important activities of an appraiser is to assimilate data. Data can be divided into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a variety of sources. To look up recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Andrew Hyatt is the best documentation to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender in case a borrower defaults on the loan and the value of the house is less than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Andrew Hyatt when it comes to analyzing real estate appreciation in Denver and Denver County. Contact us today.

Should I do anything in advance of the appraisal inspection (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 features. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

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

A survey or plot map of the property and building (if available).
List of personal property to be sold with the building.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"? (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."

Does the appraisal belong to the bank or the consumer? (Top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Top)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 were second, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.