|
R. Brian Orth State-Certified Residential Real Estate Appraiser #2646 |
|
Over 25 Years Experience Appraising Homes in Florida
Facts About Residential Real Estate AppraisalsAppraisals are an Important Part of Your Home Buying TransactionA real estate appraisal helps to establish a property's market value–the likely sales price it would bring if offered in an open and competitive real estate market.Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending. Don't confuse a comparative market analysis, or CMA, with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMAS, but an appraiser's report is much more detailed--and is the only valuation report a bank will consider when deciding whether or not to lend the money.
About Appraisers and Appraisals
What You'll See on a Residential Appraisal ReportAppraisals are very detailed reports, but here are a few things they include:
Residential Appraisal MethodsThere are two common appraisal methods used for residential properties: Sales Comparison Approach The appraiser estimates a subject property's market value by comparing it to similar properties that have sold in the area. The properties used are called comparables, or comps. No two properties are exactly alike, so the appraiser must compare the comps to the subject property, making paperwork adjustments to the comps in order to make their features more in-line with the subject property's. The result is a figure that shows what each comp would have sold for if it had the same components as the subject. Cost Approach The cost approach is most useful for new properties, where the costs to build are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed.
So What Does the Appraisal Mean to You?Your personal approval is accomplished early in the loan process, but final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case you default on the loan. If the property appraises lower than the sales price, the loan might be declined, but that isn't the only hurdle it must pass. Other facts on the appraisal can be a problem, too:
Those are just a few examples of negatives that could stall your purchase. The lender will study the appraisal carefully before determining whether or not the property qualifies to serve as security for your loan.
An Appraisal Isn't a Home Inspection!Appraisers make notations about obvious problems they see, but they are not
home inspectors. They do not test appliances, look at the roof, check the
chimney or do any other typical home inspection tasks. Never count on an
appraisal to help you determine if the home is in good condition. |
Call Us Today For All Your Copyright © 2005-2022 Orth &
Associates, Inc. All rights reserved.
Residential Real Estate Appraisal Needs
State-Certified Residential Real Estate Appraiser #2646
Cell 941-920-5342