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HOME VALUE A real estate appraisal is the valuation of how much a home is worth by a 3rd
party. An appraiser considers a site, its amenities, and the physical condition
of the property when determining a home's value. These factors are then compared
against other properties (similar to yours) in the area around your home that
have recently sold. By comparing all of these factors, the appraiser determines
an estimate of what he or she thinks that the property could sell for (what it
is worth).
After the physical inspection, the appraiser spends a considerable amount of
time researching and collecting data about the area before arriving at a final
value. An appraisal's decision can make or break a refinancing or an estimated
selling value - make sure that your appraiser has a solid reputation and is
reliable.
Why Are Appraisals Important?
Because much private, corporate, and public wealth lies in real estate, the
determination of its value is essential to the economic well-being of society.
It is the job of the professional appraiser to determine these values by
gathering, analyzing, and applying information pertinent to a property.
Unquestionably, the professional opinion of the appraiser, backed by extensive
training and knowledge, influences the decisions of people who own, manage,
sell, purchase, invest in, and lend money on the security of real estate. And
because the appraiser is trained to be an impartial third party in the lending
process, this professional serves as a vital "check in the system," protecting
real estate buyers from overpaying for property as well as lenders from over
lending to buyers.
What is the Difference Between an Appraisal and a Whole House Inspection?
The appraiser is not a whole house inspector, engineer, architect, electrician,
plumber, H.V.A.C. technician or contractor. The appraiser briefly walks through
the house to get an idea of the general condition and room count. An appraisal
is not a guarantee of condition. The appraiser will ask about any visible
problems and those which may not be visible, and will do his/her best to gauge
any impact on value attributable to those problems. You are encouraged to seek
the advice of experts if you have any questions about the structural or
mechanical aspects.
What Are Some Reasons For Getting An Appraisal?
There are many reasons to get a real estate appraisal. The most common reason is
for housing and mortgage transactions. Here are some of the other reasons that
you may need an appraisal:
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to lower your tax burden
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to establish the replacement cost of insurance
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to contest high property taxes
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to settle an estate
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to help you acquire a loan to purchase a home
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to provide a negotiating tool when purchasing real estate
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to determine a reasonable price when selling real estate
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to protect your rights in a condemnation case
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because a government agency such as the IRS requires it
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you are involved in a lawsuit
How Can You Help Your Appraiser?
Once you have decided that you need an appraisal and you have selected the
appraiser that you would like to work with (your real estate agent can often
recommend a credible and reliable appraiser in your area), be prepared to answer
the following questions and/or provide the following information:
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What is the purpose of the appraisal?
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When do you need the appraisal completed by?
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When did you purchase the property?
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What personal property, such as appliances, furniture, etc.. should be
included in the appraisal?
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What improvements to the property (if any) have you made and when did you
make them?
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Provide a copy of deed, survey, purchase agreement, or other pertinent
papers pertaining to the property.
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