If you are selling or buying a horse property in Colorado, then you should be aware of how market value works. This explanation of the Colorado market value is simple enough, but there are certain nuisances that make it more complicated. For example, homeowners could order an appraisal before they put their home on the market. However, they would incur the expense of it themselves. Also, it can’t be used by the buyer or their lender in the home buying process.
Licensed appraisers look at Colorado market value in three ways—The market data, the replacement cost and by income. A part of being an appraiser is determining which of these three ways they will use. The replacement cost looks at what it would cost to rebuild the property. The income way uses a capitalization rate based on the net operating income of a property to determine value. The market data way relies on recent sales of similar properties nearby.
Colorado Market Value
Real estate agents use a similar approach to determine fair market value. They perform a Competitive Market Analysis or CMA. This analysis it looks at recent sales of similar properties, considering properties currently for sale and what homes actually sold. Both appraisals and Competitive Market Analysis reports have a distinct advantage. One is based on the personal opinion of a professional and the other is based on online website estimates using raw data and mathematical formulas.
Though this information is important when selling a home, it is not the “end all, be all” so to speak. Regardless of which method is used, it is just an estimate. Obviously, some estimates are more accurate based on the experience of the person making the estimate. If you need help finding an experienced appraiser that can give you accurate Colorado market value estimates, contact your friends at Colorado Horse Property today.
