Q & A on Home Appraisals in Routt County

As part of our ongoing series to answer our most frequently asked questions at The Group Real Estate, we sat down with longtime local and partner with ASI Appraiser Services, Jim Hoy.

Who needs to get an appraisal?

• Appraisals are needed for various reasons including mortgage financing purposes, tax and legal matters, such as divorce.

What is a home value based upon?

• The main things are location, quality of a property, size and condition. We try to pair properties in order to compare and assess a home’s value.

What happens during an appraisal?

• We start with a full walk-through of the property to look at both the exterior and interior, to determine gross living area. The lender requires a photograph of every room and a floor plan which shows the calculations for the livable square footage. Most of the work is heavily research based and is done back at the office.

What do you do if the property has no obvious comparable?

• To be honest that is very unlikely in Steamboat. If a property is unique for whatever reason, we have to expand our search parameters. We look for dated sales and/or sales from competing markets.

Can a property owner contest a valuation?

• Absolutely. They have to put their concerns in writing with their lender/ loan officer. If they know of a better comparable, which we may have missed, they can share that information and have the property reevaluated.

Do you have to have a formal appraisal done before you plan to sell your property?

• No, but some people like to get one done to be sure they know what the fair market value is for their property. It’s usual if a property owner has a trusted relationship with their realtor.

What happens after an appraisal is completed?

• When the report is completed it is sent to the lender, who intern underwrite the report and contact the appraiser with any concerns. Once the appraisal passes it is shared by the lender with the borrower. The appraiser has no direct communication with the borrower.

 Are there any things a property owner can or should do prior to an appraisal to increase the valuation?

• It certainly helps to present the property in a good, tidy condition.  In terms of what you plan to do prior to listing, it really depends on how the market is performing. Kitchen and bath updates generally enhance marketability, as does flooring and paint. We generally see updated properties sell for a premium. The specific market conditions at the time of sale affect value considerably.

Does the valuation of a property change with market conditions?

• Yes, it relies on supply and demand to a degree. The appraisal report is more of a snapshot of the market on a given date. Market conditions and values are constantly changing. We’ve seen moderate increases in value for the past few years, with the past six months showing sharp increases for many market segments. As we all know the trend isn’t always upward. It’s a cycle and we will most likely see a declining trend at some point.

Can you choose your own appraiser?

• No, the lender chooses the appraiser.

How much does an appraisal cost?

• It varies between $500 and $1500. Generally the lender dictates the fee.

How long do appraisals take?

• Inspection takes roughly 20 minutes to two hours, depending on the size of the property. The report can take 5 to 20+ hours, depending on complexity.

Do you have any other words of advice we can share with our clients?

• Clean up a bit and secure the pets. Some dogs don’t like appraisers!