Q: What is a real estate appraisal?
A: A real estate appraisal is a detailed evaluation of your home?s current likely sales price. The value would be based on an examination of how it would compete in the marketplace with other like homes in your subject area.
Q: What makes an appraisal different than the Comparative Market Analysis that my realtor can provide me?
A: There usually can be confusion regarding these two methods. The realtor will do a general analysis of how your home competes with other homes for sale and other recent sold homes in your area. This analysis will be to determine a reasonable ASKING PRICE in your marketplace today.
The appraisal, however, is a much more detailed report performed by a professional licensed appraiser. This report is time sensitive, as market conditions can change monthly. The appraisal is generally required by a lender in conjunction with obtaining a mortgage. The lender wants to be sure the home is truly worth the amount of the loan that will be offered. An independent appraisal can be performed as an additional aid to determine market value of one?s home prior to placing it on the market. In this case the homeowner would pay for the appraisal .If the value comes in different than you anticipated then please consult your realtor and lender.
Q: Who are appraisers?
A: Appraisers must complete a series of courses and obtain certification and licensing in their respective state of practice. The benefit to appraisers is that they are objective third parties
that have no financial gain regarding your property. Appraisers are NOT home inspectors. An
appraiser is paid at the time the appraisal order is submitted.
Q: How many methods can an appraiser use?
A: The most common method is the Sales Comparison Method. The appraiser compares your property with other sold properties (called comps) in your area. Because no two properties are exactly alike the appraiser will make dollar value adjustments bringing the features of the competing properties more in line with your (subject) property. The appraisal can also identify issues, like roadway access, that a new buyer would need to know that could impact their property use now or in the future.
The second method is the Cost Replacement Method. The appraiser will do an approximate calculation of what it would cost to replace your property should a catastrophic event occur. This is the easiest method in new homes and new construction.
Q: What does an appraisal look like?
A: The appraiser will use a specific required format when compiling the report. The properties will be lined up in a vertical alignment listing their amenities. The first property will be yours, called the ?subject? property. There will be three other properties for comparison that are within a reasonably allowable distance to your property. Items will be listed that could have a positive or negative effect on the subject?s value. Items such as average sales time, land use and size, neighborhood, additions and updates will be notated.
