Facts about Appraising a Home
Home appraisal will serve a great purpose in the business of buying or selling a home where an expert’s opinion is needed. Often, most lending institutions will use this professional to estimate the value of the home before lending any money to the buyer. This is a part of a mortgage process that is very crucial. For a seller who has priced the house at a price higher than what the appraiser has determined, the bank will not lend the money to the buyer the total amount the house cost according to the seller. These financial institutions will want to see that the buyer and the bank are investing in an amount that matches the market value of the property. This appraisals therefore protects both the buyer and the bank.
Most of these banks will give you a list of certified and licensed professional appraisers who will determine the value of the home. This pool of professional appraisers ensures consistent results, but it will be upon the borrower to quote the price he/she wants to borrow. Professional appraisers have two different approaches for them to find the value of the house. Sales comparison approach is one these appraisers use and the other is a cost approach.
The comparison method determine the value of the home by comparing it with the other houses in the neighborhood that were recently sold. The comparison is done on the features of these houses and the one in question. Such things as the size of the home, the size of the compound, the type of a house, various components and also various features.
Cost method is another approach where new houses are valued based on reproduction cost. The basis is that of how much such an house will cost to build if the standing one was wiped out. After that cost has been determine, the next focus will be on the worth of the land and also the depression value to determine the final price.
A complete appraisal should have the following content. The report should show in details how the appraiser determine the worth of the house. The method of appraising is described here in details. The house should also be described well, with its features and the improvements that have been done. The appraiser should ensure that all the important features are not left out in the description.
Any structural problems should be reported be it leaking or any other. The appraiser should do well and gather various information to describe the neighborhood area. The appraiser should also do some comparison with the market to boost the conclusion of the property value. Also, a photo or map that shows the features of the house will be important.