Having a correct real estate appraisal is important when you are selling or else buying at either less than or at its full value. But, this does not mean that the appraisal is an actual picture of the property’s value in the market. The main purpose of real estate appraisal relates to providing lenders with the assurance that the value of the property can cover the amount of the loan, which it is being applied for.
Most of the time, lenders will already have a specific appraiser that is 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 that the lender is at ease with the property appraiser, the faster the loan transaction will be carried out.
A proper real estate appraisal will involve the full details of the all the criteria that were taken into account during the property’s evaluation of value. 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. Some of the property’s features may be changed and engineered to be able to fit new special improvements, unique architectural designs, 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 they are however not the same, the aforementioned two have greatly distinct jobs. The one thing in common between the two is that their job involves looking at properties. But, the inspector does not look analyze the property but instead does the opposite, he finds the flaws. Just keep in mind that inspectors are just there to check whether the property is in accordance to the codes or have any damage, while the appraisers see how much it is worth.
The number the appraiser comes up with is reliant to the prices of like properties in the same area that got sold, code upgrades and repairs will reduce the property’s value, and considering the potential revenue generation properties that the property may posses. Usually the first thing that will be disclosed is the appraisal fee. Be suspicious of those appraisers who cannot or won’t give an estimate. But if the lender already has an appraiser chosen, then the appraiser’s fee will be taken care of the lender with their own funds.