An essential aspect of either disposing of a property at its absolute value or buying a property at a value that is smaller than its total value is to have a real estate appraisal that is accurate. 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.
A lot of times, lenders will already have an appraiser specifically assigned to the properties that are in your area. There are cases where are even given the option of choosing an appraiser that you like from a list. 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. The property itself may be customized to allow for some unique architectural designs, special enhancements, and to improve road accesses. If there is a private road access featured in the property, the lender will usually ask for an agreement regarding the preservation of the road.
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 thing that the two have in common with their job is that they work 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. 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. The appraisal fee will most of the time be disclosed prior. Be suspicious of those appraisers who cannot or won’t give an estimate. But if the lender already has a chosen appraiser, then the fee will most likely be taken care of by the lender using their own funds.