When you buy or sell a home, you should seek a third party to provide real estate appraisal services. Regardless of what the other party claims about using their person, you would rather pay more and be sure the results are true.
There are some other legal reasons to consult an appraiser in court cases, and the top reason is for the settlement of a divorce and this is to ascertain the value of property to ensure equal division. Property appraisal services can also offer real estate loan underwriting services. The financial soundness of the borrowers is under constant pressure for borrowers as a result of the recent economic crises as credit scores drop, and unemployment rates rise. Banks depend on property appraisals from state-licensed companies that they trusted to determine the value of an asset.
In the cost approach, the cost of replacing the building as well as making improvements is estimated, whereby the value of the site is added, and the estimated depreciation is deducted. In the Direct Sales Comparison Approach, also referred to as the Market Data Approach, the appraiser determines the value of similar properties that were recently sold on the local market and, through a suitable process of adjustment, estimates the fair market value of the property in question-based on these comparable sales.
The lenders might have an appraiser on its staff or contract an independent appraiser but sometimes, you will be allowed to choose your appraiser. An appraiser should include in the report about the issues considered harmful to the property’s value, like; little access to the property, and maintenance problems.
In this method, the appraiser will estimate the market value of the property by comparing it to similar properties sold in the same area. There are usually no properties alike so the appraiser looks for recently sold properties with the most similar characteristics and adjusts the subject property to get it inline with the comparable property.
Since the appraiser knows the cost of building the house, he or she can estimate how much it will cost to replace the structure if it were destroyed. The accessibility to the property can determine if your property can be sold faster. If the appraisals are low, there are steps you can take to increase the market value of the property to meet the standards of loan institutions.
Negotiations with the seller and buyer about the price can make the deal work. Consider the condition of the property before you apply for a mortgage.
Look for yourself at the accessibility, the condition of the foundation and you can hire independent appraisers to examine and evaluate the true market value of the property prior to applying for a mortgage. A quick search of local property appraisers on Google, Yahoo, or Bing will yield a list of companies in your area.