What is an appraisal?

The Barr Team Info for Home Buyers, Info on Home Financing, Info on Real Estate Transactions Leave a Comment

In this video Henry answers our questions about appraisals…
Hi this is Henry Barr here at The Barr Team with Re/Max Properties of the Summit here in Frisco, Colorado. Rachel just asked me “What is an Appraisal?” An appraisal is a report given to a lender describing the value of a property based on current market conditions. The appraiser usually has to use past sales and can sometimes use under contract sales, but really cannot use what the future of the market will be.  It is based on past sales and actual activity and is normally done with a square footage basis along with several others factors that enter in.  An appraisal is usually based on comparable sales from the past six months and there are a number of other guidelines that an appraiser is bound by. And they are getting more stringent this past year and we’re seeing them moving forward with more criteria that the appraiser has to use to keep them current and accurate. Some people mistake a market analysis, which is usually provided by a real estate Broker, as an appraisal, however that’s not an appraisal. An appraisal is done by an appraiser who is licensed in the State of Colorado and usually runs anywhere from $500-$800 in today’s market (in Summit County). The appraisal is normally paid for by the Buyer and normally done in all loan transactions, occasionally they can be done is cash transactions should a Buyer want one.