Thank you for considering Colorado Appraisal Consultants for your appraisal needs.
Part of our appraisal bidding process is to ensure that you are fully aware of the available reporting options and how they are used within appraisals.
Please take time to review the entirety of this webpage prior to moving forward with an appraisal.
If you have any additional questions, or are unsure as to which option is best for your situation, please do not hesitate to call us at 720-315-2530.
After we have finalized the scope of work, we will send you an engagement letter which serves as the formal contract for appraisal services. We send this document electronically and require the e-mail address of the person that will be signing.
Pricing and turn-around time cannot be secured until we have a fully executed engagement letter. They are subject to change without notice.
You will need to sign and return the engagement letter (electronic signature) prior to us commencing work on the project or securing the proposed turn-around time.
After we have received the signed contract for services, we will touch base with the property contact to schedule the property inspection.
Scope of Work
Our understanding of developing a scope of work that will produce credible assignment results is largely based on the property address you have submitted, the location of the property, the presumed occupancy of the property, the complexity of the property and appraisal problem, the stated intended use of the appraisal, and the needs of the client/intended users.
Unless you have indicated otherwise, our assumption is that purpose of the appraisal assignment is to develop and report an opinion of current “As is” Market Value for the 100% interest in the real estate only, for the use in which you have indicated you need the appraisal for. No mineral rights, water rights, fractional interests, business value, personal property or FF&E values are to be included.
Unless you have indicated otherwise, it is our assumption that there is only one property and one valuation scenario. If there is more than one legal parcel, or part of your appraisal needs involve multiple valuation scenarios, please let us know prior to signing the engagement letter.
Unless you have indicated otherwise, it is our assumption that the appraisal is not for a litigation or high scrutiny use. If your appraisal needs relate to a litigation or high scrutiny use, please let us know prior to signing the engagement letter.
Unless otherwise indicated, the appraisal may not include all three approaches to value (sales comparison, cost and income approaches). This is because for many properties, not all three approaches to value are needed to reach a credible opinion of value. The three most common approaches to value are below. If you specifically need or would like all three, a particular one, or need the appraisal to separate land and building value, please let us know prior to signing the engagement letter. If any approach is deemed as not applicable by the appraiser, its exclusion will be explained in the appraisal.
For new clients that we have not worked with, we request that the appraisal fee be due upon signing the engagement letter. After we have a relationship established, 50% is due upon proceeding with the appraisal and 50% is due upon delivery.
Preferred payment is by check. We accept e-checks, credit cards, paypal and instant wire transfers. A 3% surcharge is incurred if using these methods.
We typically will either pick up the fee on the property inspection or request that it be mailed upon signing the agreement.
After the appraisal has been started, the fee is non-refundable.
In our efforts to provide quality services with the quickest turn-around times available, we require a signed contract for services before finalizing the estimated delivery date of the appraisal.
Our appraisal scheduling system accepts new orders based on when the contract is received. In some cases, an appraisal can be bumped up or down in the delivery date queue if a client takes more or less time to sign a contract.
In the event that we receive a signed contract to proceed with an order that would subsequently push yours back, prior to having an executed agreement with you, your appraisal will be moved to the next earliest delivery date.
We have an electronic office policy. That means that all documents transferred from us to you will be in electronic format. We kindly request that all documents transferred from you to us are in electronic format.
The appraisal report will be provided via PDF format only. If a hard copy is requested, additional printing, shipping and processing fees apply (based on the report type).
About Colorado Appraisal Consultants
Colorado Appraisal Consultants is an appraisal company based in Denver, Colorado. We have experience providing valuations for a range of situations, property types and business entities.
Our expertise ranges from small residential to complex commercial properties. We’ve appraised all property types including office, industrial, multi-family, land, retail, and residential, including most major sub-types. Additionally, we’ve worked in various markets within Colorado as well as out of state. Our appraisal experience has been used by clients with properties in various stages of the real estate cycle.
Colorado Appraisal Consultants has experience providing appraisals for the following purposes:
- Expert witness
- Dispute Resolution
- Gift Tax
- Estate Settlement/Date of Death (IRS-income tax)
- County Tax Appeal
- Debt Restructuring
- Foreclosure (REO)
- Private Financing
- Mortgage Financing/Lending (including SBA)
- Metro District Financing
- Internal Decision Making
- And more…
Our appraisal services have been used by clients such as lenders, attorneys, banks, owners, buyers, sellers, property managers, brokers, investors, tenants, developers, private corporations, publicly traded corporations, franchises, businesses, non-profits, religious organizations and more.
We strive to produce the highest quality appraisals available.
Past Client Reviews
Our company currently has more positive online reviews than any other appraisal company in Denver.
“I have now engaged Colorado Appraisal Consultants six different times for various appraisals needed over the last 3 years. Cody and team have provided me with extremely informative reports, at a very fair price, on time – every time. Most recently, I had a very short deadline in which to get together my various inspections prior to a closing and Colorado Appraisal not only went outside their usual area for me, but also had the best price given the tight constraints I had. I would highly recommend this company for all your commercial appraisal needs. I will absolutely use them again and again….”
– Kelly Clayton, Property Manager for City Electric Supply
View More Reviews Here.
Client, Intended Use, Intended User
It is important to make the appraisal firm aware of the needs of the client, as well as the intended use and intended users of the appraisal, prior to commencing work on the project.
Within our appraisal contract, the client is the entity paying for the appraisal. We will need the following client identification to put together the engagement letter:
- Client name
- Client company name (if applicable)
- Client mailing address
- Client phone number
- Client e-mail address (direct to the person signing the contract)
The Intended Use of the appraisal refers to the use or purpose in which the appraisal report will be used for.
It is the client’s responsibility to notify us of all intended uses prior to commencing work on the project. Use of the appraisal for any use not named as an intended use, without our consent, is prohibited.
The Intended User(s) refers to the person(s) or entity(s) that will be using the appraisal. It is the client’s responsibility to notify us of all intended users prior to commencing work on the project. Use of the appraisal for any user not named as an intended user, without our consent, is prohibited.
To ensure the appraisal report will comply with the use requirements/expectations in which you need the appraisal for, please ensure that the appraisal firm is fully aware of what you intended to use the appraisal for.
In the event that there is another use (Intended Use) or user (Intended User) in which you plan or wish to use the appraisal for, please notify us prior to signing the engagement letter.
Report Format and Types in General
The three most common report types that we offer are below. All appraisals performed by our company are done on our own, proprietary, excel and word-based programming. All appraisals are “complete” appraisals and include a certification of value. All report types can have one, two, three, or more approaches to value.
The main differences between the report types are in the amount of details presented within the report, not the number of approaches to value or valuation scenarios.
In addition to the valuation of the property, appraisals are commonly used as reference points for the property at a given point in time. Keep in mind that with more/less details in the report, the appraisal will be more/less useful as a reference for the property and market.
Restricted Appraisal Report
A Restricted Appraisal Report contains an extremely limited amount of detail.
As a result, it can legally only be relied on by one party, which is the client. It cannot be used for lending, or where more than one party must rely on the results of the appraisal. It is most appropriate if the user ordering the report is already familiar with the subject property and only wants a value.
Summary Appraisal Report
A Summary Appraisal Report contains a moderate amount of detail.
This report is considered a summary of the subject property and appraisal process. Legally, it can be used for almost any situation. This report type generally offers a good balance of detail and price. Though it may not be considered adequate in detail for uses in which the appraisal will come under high scrutiny or will be compared to another appraisal to decide a final value settlement.
Most clients ordering an appraisal through us, who are not ordering the appraisal for litigation, order this report type.
Comprehensive Appraisal Report
A Comprehensive Appraisal Report contains an extensive amount of detail.
This report is considered a comprehensive overview of the subject property and appraisal process. Comprehensive reports are most appropriate for litigation, partnership dissolution, or when the users of the report desire a comprehensive overview of the property and market.
Appraising Various Property Interests
It is important to understand which property interest you need appraised. Appraising one property interest over the other could produce a higher or lower value.
Fee Simple Valuations
A valuation of the Fee Simple Estate interest disregards any existing leases and lease terms. If it is an income-producing property, income is based on market rates.
The fee simple estate interest represents the absolute, unencumbered interest of the owner. As a result, an appraisal of the fee simple estate interest assumes that the property could be bought, sold, demolished, re-purposed, or occupied by any user.
Generally, a valuation of the fee simple estate interest is most appropriate if the property being appraised is owner-occupied, vacant, on a month-to-month lease, subject to a lease expiring within the next 2 years or less, or in any event that the client wants or needs to know what the property would be worth assuming it can be used to its highest and best use or occupied by any user.
Leased Fee Valuations
A valuation of the Leased Fee Estate interest considers any and all existing leases and lease restrictions in-place. It can also consider proposed leases/lease terms, if applicable.
The leased fee estate interest represents the encumbered (leased) interest of the owner. As a result, an appraisal of the leased fee estate interest assumes that the property can only be occupied, used, or disposed of in a manner that is consistent with the legal obligations set forth within the lease(s).
Generally, a valuation of the leased fee estate interest is most appropriate if the property being appraised has an actual lease or several leases in-place. If the property is under a long-term lease, a valuation of the leased fee estate interest is typically most reflective of current market value
Fee Simple vs. Leased Fee Valuations
If the “contract” (lease) income and expenses are equivalent to “market” rates, the appraised value of the fee simple estate should generally be equivalent to the leased fee estate, and vice versa.
If the “contract” net operating income (NOI) is higher than market NOI, an appraisal of the leased fee estate should generally produce a higher value than an appraisal of the fee simple estate.
If the “market” NOI is higher than the contract NOI as a result of a lease, an appraisal of the fee simple estate should generally produce a higher value than an appraisal of the leased fee estate.
Fee Simple and Leased Fee Combination
It is not uncommon for a client to order an appraisal of the value of the fee simple estate interest, as well as the value of the leased fee estate interest. For some situations, a valuation of both interests may be most appropriate.
Some clients prefer to know the value of the fee simple estate interest even if the property were leased on a long-term basis. This helps to assess risk, based on the premise that if the user were to vacate, the property would be leased at a market rate.
A valuation of the Leasehold Estate interest considers the value of the tenant’s possessory interest created by a lease. For instance, if the property is on a ground lease, is is part of a larger master lease, the interest to be appraised would be the leasehold estate.
It is the client’s responsibility to notify us if the property is subject to a lease, prior to commencing work on the appraisal. Often times, the appraiser does not know if the property is leased or not, when bidding on the appraisal. In some situations, it can be more obvious and the appraiser may have a good idea the property is leased.
It is also the client’s responsibility to select which interest they would like appraised. The appraiser can provide guidance as to the most likely interest the market would be buying or selling, but they cannot solely make the decision of which interest should or needs to be appraised.
Value Perspective (Date)
Appraisals can be “effective” as of the past, the present, or the future.
If the effective date of value is in the past, the value opinion is considered to be “retrospective”. Date of death appraisals are retrospective to the date of passing.
If the effective date of value is current, the value opinion is considered to be “current”.
If the effective date of value is in the future, the value opinion is considered to be “prospective”. Appraisals of proposed construction typically have at least one value perspective that is prospective to the date of completion.
It is the client’s responsibility to notify us if the effective date of value needs to be in the past, the future, or a combination of sorts. Unless otherwise indicated, we assume the effective date of value needs to be “current”. In this case, the effective date of value will be the date in which the property is inspected.
Types of Value
There are many types of value. This is an overview of the most used value types within commercial appraisal. Selecting which value type is most relevant to your situation is largely a function of the intended use of the appraisal and any requirements of the appraisal results.
Market Value assumes a normal marketing time and that the buyer and seller are equally as motivated to consummate the sale (no one is under pressure). Read more about market value here and/or view the formal definition.
“As is” Market Value
“As Is” Market Value refers to the Market Value of the property as it sits legally and physically as of the effective appraisal date. Read more about “as is” market value here and/or view the formal definition.
Fair Market Value
Fair Market Value (FMV) assumes that a buyer and seller are aware of the facts and that the price in which the property exchanges for is not the result of a forced sale. Read more about Fair Market Value (FMV) here and/or view the formal definition.
Disposition Value assumes a shorter than average marketing time, due to the fact that the seller is under pressure to sell relatively quickly. Read more about Disposition Value here and/or view the formal definition.
Liquidation Value assumes a severely shortened marketing time, due to the fact that the seller is under extreme pressure to sell very quickly. Read more about Liquidation Value here and/or view the formal definition.
Business Enterprise Value (BEV)
Business Enterprise Value, also known as BEV, refers to the value of the business only. Read more about Business Enterprise Value here and/or view the formal definition.
Going Concern Value
Going Concern Value is the total value of the real estate plus the business operations. Read more about Going Concern Value here and/or view the formal definition.
Retrospective Value is the value of a property on a specific previous date. A Retrospective Value opinion is not a value itself, rather, it modifies another value type (market value, fair market value, etc.) and associates a specific previous date with it. That is, Retrospective Value can be used with Fair Market Value to create Retrospective Fair Market Value. Read more about Retrospective Value here and/or view the formal definition.
Prospective Value is the anticipated value of a property on a specific future date. A Prospective Value opinion is not a value type itself, rather, it modifies another value type (market value, disposition value, etc.) and associates a future date with it. Prospective Value can be used with Market Value to create Prospective Market Value. Read more about Prospective Value here and/or view the formal definition.
It is the client’s responsibility to notify us if there are any additional valuation scenarios other than what we propose.
A hypothetical condition within a real estate appraisal is a condition or factor that is presumed to exist on the property for the purpose of the valuation, but does not actually exist on the property as of the effective date of value. One example would be an appraisal made for a proposed building, wherein the “prospective” market value is based on the hypothetical condition that a building exists, when in fact the property is land only. Another example would be an appraisal that considers a building with a proposed lease, that, in addition to market value without the lease, the client wishes to know how the property value will change if the proposed lease is executed.
Appraisals can include none or several hypothetical conditions, dependent on the needs of the client and/or the scope of work. Hypothetical conditions can be useful alternative valuation scenarios to explore potential value changes based on one or several varying factors.
Most appraisals using hypothetical conditions must be ordered by the client at the start of the appraisal. The appraiser is often not aware of hypothetical conditions or alternative valuation scenarios so they must be informed of them.
Approaches to Value
Most appraisals can employ three primary approaches to value. The appraiser generally concludes which approaches to value are most appropriate to the valuation. Not all three approaches to value are required for a complete appraisal. An appraisal can have one, two, three, or more approaches to value.
Sales Comparison Approach
The Sales Comparison Approach is based upon comparable sales and the principle of substitution; that is, when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. Since no properties are ever identical, the necessary adjustments for differences in quality, location, physical characteristics and market appeal are a function of appraisal experience and judgment.
The Income Approach involves an analysis of the property in terms of its capability to produce positive income. There are many iterations of the Income Approach, which generally fall within the categories of direct capitalization or yield capitalization. The prior is based on one year of net operating income, theoretically assumed to proceed as such into perpetuity. The latter is based on a multi-period holding, reflecting yearly changes in income and expenses, for a defined holding period. Yield capitalization is also referred to as a Discounted Cash Flow (DCF) analysis.
The Cost Approach is devoted to an analysis of the physical value of the property; that is, the current market value of land, assuming it to be vacant, to which is added the depreciated value of the improvements present on the site. The depreciated cost of the building and improvements is derived based upon an estimate of the cost of reproducing or replacing the improvements, from which must be deducted accrued depreciation in terms of physical deterioration, functional obsolescence and external obsolescence, if any. Physical deterioration measures the physical wearing out of the property as observed during the field inspection. Functional obsolescence reflects a lack of desirability by reason of layout, style or design; and external obsolescence denotes a loss in value from causes outside the property itself.
Unless otherwise indicated, the appraisal may not include all three approaches to value. This is because for many properties, not all three approaches to value are applicable. If you specifically need or would like all three, a particular one, or need the appraisal to separate land and building value, please let us know prior to signing the engagement letter. If any approach is deemed as not applicable by the appraiser, its exclusion will be explained in the appraisal.
Property Inspection Limitations
All appraisal options include a topical property walk-through (inspection). The appraiser is not performing a certified property inspection or inspection analysis to a level of detail that they will verify if all systems and building components are adequately functioning.
An ‘inspection’ made for appraisal purposes is in no way equivalent to an ‘inspection’ made by a property inspector that will produce a report detailing the condition of the property, including any structural, environmental, or MEP adversities.
The appraiser only looks topically at the building and site and does not test anything.
Terms and Conditions of the Proposal
Pricing and delivery dates are highly dependent on workflow. It is subject to change without notice, until a fully executed Engagement Letter is received by Colorado Appraisal Consultants, including receipt and successful depositing of the appraisal fee.
The Bid is not a contract or any other promise for appraisal services, express or implied. Nor is this webpage. An Engagement Letter which will be sent on our behalf will serve as the formal contract for services.
The Bid is not an offer for appraisal services, express or implied. Nor is this webpage. An Engagement Letter which will be sent on our behalf will serve as the offer for services. Colorado Appraisal Consultants is in no way obligated to perform any services for any reason, and retains exclusive authority and discretion to proceed with any relationship, arrangement, or services.
Additional Assumptions and Limiting Conditions will be noted in the appraisal report, as well as the Engagement Letter.
No warranty is made with regard to the accuracy of the information on this page.
An appraisal represents an opinion of value only. Different appraisers may have different opinions of value. Appraisal- “1. The act or process of developing an opinion of value. 2. An opinion of value.”
There may be additional considerations not taken into account within this webpage. Consult with an appraiser prior to ordering an appraiser.
If this page is updated, only the most recent version is applicable.