Having a correct real estate appraisal is important when you are selling or else buying at either less than or at its full value. However, the appraisal should not be interpreted as the exact picture of a property’s market value. The main objective of real estate appraisal is for assuring lenders that a property is worthy of the amount of the loan, if such property is being used to secure a loan.
A lot of times, lenders will already have an appraiser specifically assigned to the properties that are in your area. And sometimes, you can even be the benefit of having to choose an appraiser of your liking from a list provided. 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 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. 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 there is a private road access in the vicinity of the property, most of the time the lender would need to have an agreement regarding keeping the private road 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 only common thing that the two jobs have is that they deal with 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 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 first thing that will be disclosed is the appraisal fee. An appraiser who cannot provide you with an estimate is a big red flag. 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.