Regardless if you are selling a property at full value, or buying one at a value that is lesser than the full value, having a truthful real estate appraisal becomes a crucial aspect of that transaction. On the other hand, you are not supposed to believe that such appraisal is the complete picture of the market value of the property. The main purpose of having real estate appraisals is to guarantee the lenders that the property at hand is actually worth the amount of loan.
A lot of times, lenders will already have an appraiser specifically assigned to the properties that are in your area. You are sometimes able to choose an appraiser of your liking from a list in some cases. The more the lender is acquainted with the property appraiser, the loan application will be processed even faster.
A proper real estate appraisal procedure will include all of the complete details of the aspects that were taken into consideration in the evaluation of the value of the property. Mostly it will involve the property features data, local sales data, and an estimate of the average time it takes to sell similar properties in the area. The features of the property may be altered to accommodate unique architectural designs, special improvements, or improve road accesses. If within the vicinity of the property lies a private road access, usually the lenders will want an agreement on keeping the private road access intact.
A mistake common to all is the belief that inspectors and appraisers are one and the same. But in fact, inspectors and appraisers have vastly different jobs. The only common thing that the two jobs have is that they deal with properties. The inspector is tasked with finding any flaws that are present on your property as opposed to determining its value like what an appraiser would do. So just remember that the appraisers are there to see how much your property is worth while the inspector checks whether or not the property is in accordance to the codes or see if there are any damages.
The property’s value that the appraiser would come up with is based on the properties in the same area that were recently sold and are similar to the one you own, any code upgrades and repairs will hurt the property’s value, and the property’s possibility of generating revenue will also be taken into account. Usually the appraisal fee will be disclosed in advance. An appraiser who cannot provide you with an estimate is a big red flag. But if the lender has their own lender, the appraiser will be compensated by the lender’s funds.