Planning to sell your home but clueless about its market value? Getting your home and property appraised would help you get an idea about your property’s value. However, the appraised value should not be confused with comparative market analysis (CMAs). The appraised value is the only value honoured by banks whenever you are planning to loan money.
If you are planning on getting your property appraised, then you would have to consider the banks’ preferred appraiser. Usually, the lender or the banks would have contracts with an exiting appraiser and you are required to get the services from them. If the banks or the lender would allow you to get a third-party appraiser, it may take a while before the financing is approved.
Appraisal reports are actually very detailed. They would include details of the property, the status of real-estate market where the property is located, access to the property like roads, flawed characteristics of the property, how long the property would be up for sale, and the type of the neighbourhood where the property is located. The appraiser would also include in their notes if the road going into the property is private. The bank granting the loan may require a road maintenance agreement to be signed.
Appraisers should also not be confused with inspectors. Inspectors intend to check the chimney, test appliances, inspect fixtures and recommend repairs to increase the home’s value before putting it up for sale. Appraisers would write down obvious problems in the property and their observation in the area.
When determining the value of the property, appraisers use three approaches. The value could be determined by the sales comparison approach or by comparing the property with other similar properties in the area. It could also be determined by identifying the much needed improvements in the property which is called the coast approach. In the income capitalization approach, the value is determined by the operating income that can be earned from the property.
But are appraiser fees expensive? Appraiser fees depend on the time needed to finish appraising the property. It could also be based on the amount appraiser and the person who needed the service agreed upon. Sometimes, appraisers would state that fees are not final and subject to change based on additional expenses.
Real-estate appraisal is needed when making bank loans, the property needs to be divided to multiply heirs, the property should be appraised for tax reasons, or for estate settlement. An appraisal documents reduce conflict about the property market value during these situations. However, the values stated by the appraiser are not the absolute value.
When getting an appraiser, verify his background and identify if they were able to meet requirements. States would require appraisers to be licensed, while there are others who would require appraisers to be state certified. They also have strict standards and codes to follow.
Without any question and doubt, if you are looking or aiming for your property to be financed by a bank or get a reputable private or corporate buyer to look at your property, then you would have to have it appraised. Real-estate is probably one of your biggest investments and you would like to protect and sell it in its proper value.