How Appraisers Determine Property Values

85


An appraiser’s job is to protect the interests
of the mortgage company. Lenders want to be sure that if forced to foreclose on
a property, they will be able to sell it for enough to cover the amount their
customer borrowed.

The appraised value of the home is also crucial to the buyer. If the appraisal of a piece of property comes back higher than the asking price of the house, the buyer is lucky enough to have instant equity in the home.

Appraisers Run Comps

Just like realtors, appraisers run comps when determining a home’s value. They look at the sale price of similar neighboring properties that have sold within the last six months.  Appraisers can’t compare apples to oranges to determine value. They need to make sure the other properties are truly comparable in location, size, condition, age, and upgrades.

Appraisers Check the Property

Appraisers are not home inspectors. Home
inspectors are hired by the buyer to check the integrity of the home.
Inspectors will tell the buyer whether or not the roof needs to be replaced or
whether the furnace is on its last leg.

Home inspections may take several hours to
complete, but a visit from a home appraiser may take less than an hour.

When an appraiser visits the property, he or she
checks the number of bedrooms and bathrooms. Appraisers review the square
footage of the home. They check to see if the basement is finished or not.
Appraisers are also aware of the value of the land the house sits upon.

Appraisers Look for Upgrades

When an appraiser looks through a home, they may take note of particular upgrades that raise the value of the house. While appraisers are not as interested in décor or surface cleanliness, they may note if the home has hardwood floors or new tile in the bathroom. They may not see if the air conditioning unit works perfectly or not, but they may note whether or not it works and the approximate age of the unit.

Things That Can Negatively Impact an Appraisal

Although appraisers are not there to judge you
on the cleanliness of your home, they will notice if items are in disrepair.

Appraisers may note if the carpeting is stained
or shows wear, or if the vanity in the bathroom looks as if it is from the
1980s. They will notice if windows are cracked or if the kitchen linoleum is
gouged. Each of these pings on the appraisal report can reduce the amount the
home is worth, hundreds of dollars at a time.

Maybe you watch as your neighbors put sale signs up in their front lawns. Perhaps you wonder, “where can I find a property value estimator?” Instead of hiring an appraiser, your first step to determine your home’s potential value is to reach out to a low-commission real estate agent. While traditional realtors charge 3% of the price of the home to sell your house, a discounted agent may only charge between 1% and 2%.

About The Author

vipul

Vipul is a professional blogger and online advertiser based out of Bengaluru, India. Always in a quest for new ways to make money, Vipul detail out all possible opportunities that can help anyone to earn passive income online. You can connect with on Twitter, Linkedin & Facebook





Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here