The Appraisal and Your Transaction
When we come out to look at and evaluate your home, we're not technically doing an appraisal. What we're providing in anticipation of the listing is what's known as a CMA, or Competitive Market Analysis (also known as a BPO, or Broker Price Opinion in the REO world). So what's the difference between a CMA and an appraisal? An appraisal is done by an independent third party who evaluates the property, the market, estimates market value as of a specific date and writes a detailed report.
Instant Home Valuation Snapshot - What's Your Home Worth?
In contrast to the above "valuation snapshot", appraisers will typically write a rather lengthy report that is compliant with what's known as USPAP (Uniform Standards of Professional Appraisal Practice), and they should be certified by the State of Colorado. Many appraisers also carry designations from national appraisal organizations, like The Appraisal Institute.
Whether you're selling or buying a Boulder home, your transaction will probably be influenced by the appraisal process. While we provide pricing advice as well as marketing recommendations, appraisers provide an unbiased, written opinion of value under the Definition of Market Value (willing buyer and seller, reasonable exposure time, most probable price). They will be doing many of the same things we do such as looking at all the positive and negative aspects of the market, your neighborhood, your home and all the relevant comparables (active, pending, and recently-sold properties).
The appraiser's written opinion, however, is geared toward a single-point estimate and will be summarized in a 6-page report known as a Uniform Residential Appraisal Report. In addition to the appraisal report and all its requisite Exhibits like photos, maps, Definitions, Assumptions, etc., effective April 1, 2009 appraisers have a Market Conditions Addendum that they may also have to include; we also have to deal with what's known as HVCC, or the new federally-mandated Home Valuation Code of Conduct. This all sounds good, but it fundamentally changes the appraisal process.
The point is that it's important to know and appreciate that for most real estate transactions, the appraisal an increasingly-critical component. If there is an issue with the appraisal, you will want someone representing you that knows and understands the process; it has never been more important and could make or break your deal. Inexperienced agents tend to have challenges dealing with this complex issue.
Appraisers have an important function in our financing system, and the job is not without its challenges. As a former appraiser and former designated member of the Appraisal Institute, Phil Boren is extremely familiar with the appraisal process and how it may impact your Boulder real estate transaction. That's just one of the many reasons to have us represent you in the sale or purchase of your home. Feel free to look at our credentials on our About Us page and contact us if you have any questions about the appraisal process and your Colorado real estate transaction.
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