Keys & Associates has answers to "Frequently Asked Questions"


	Keys & Associates is eager to talk to you about any questions you might have about appraisals in Frederick and Weld County. Contact us today to learn how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to require services from Keys & Associates?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the report, how can I have a guarantee that the value indicated is valid?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Keys & Associates get the data used to estimate values in Weld County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (List of questions)

The process of performing an appraisal report consists of an evaluation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, minus age and physical dilapidation, plus the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns figuring a comparison to similar properties nearby. The Sales Comparison Approach is normally the most definitive and best indicator of value for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the capital produced by the property.

What does an appraiser do? (List of questions)

An appraiser generates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers exhibit their investigation in appraisal reports.

What would cause me to require services from Keys & Associates? (List of questions)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove PMI.
To fight high property taxes.
If you need to take care of an estate.
To offer you an edge when purchasing a home.
To find a likely property value when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more detailed explanation of the appraisal process click here.

Is an appraisal the same as a home inspection? (List of questions)

The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. A third-party home inspector will evaluate the structure of the property, from the top to the foundation. Usually, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

Frankly, they share nothing in common. What the CMA depends on are superficial trends. Appraisals use similar sales which are verifiable resources. Area and architectural prices are also a priority in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, Colorado licensed professional who bases their livelihood on valuing properties in and around Weld County creates the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (List of questions)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The reason for the assignment.
The type of value contained and a definition of that value.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
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 included in the process of completing the assignment.

For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have a guarantee that the value indicated is valid? (List of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

That the information analysis utilized in the appraisal was proper.

Whether individually or collectively, there were no critical errors contained in the report, nor any relevant details left out.

That appraisal services were provided in a careful and judicious manner.

The final appraisal report was easy to explain, sound and not easily discredited.

There are rigorous classroom and experience requirements that must be met in order to become a licensed appraiser in Colorado. In addition, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires classroom study, tests and real world experience. Once licensed, he or she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers? (List of questions)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Keys & Associates get the data used to estimate values in Weld County or other areas? (List of questions)

One of the most important things an appraiser does is to collect property data. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a variety of places. To find out about recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser? (List of questions)

An appraisal is a worthwhile whenever your home's value is pertinent to some financial decision. When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Keys & Associates is the best way to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)

PMI stands for Private Mortgage Insurance. PMI guards the lender in the event a borrower defaults on the loan and the value of the house is less than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Keys & Associates when it comes to analyzing real estate appreciation in Frederick and Weld County. Contact us today.

How do I get ready for the appraiser? (List of questions)

The first step in most appraisals is the home inspection. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Information on "Homeowners Associations" or condominium covenants and fees.
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (List of questions)

In real estate appraising, 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."

Who actually owns the appraisal report? (List of questions)

For mortgage transactions, the lender orders 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 entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

Which home renovations add the most to the price? (List of questions)

It really depends on the market. 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 move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.