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Appraisal Services |
An appraisal is a professional opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser.
The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property - providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate.
At minimum, all states require appraisers to be state licensed or certified in order to provide appraisals to federally regulated lenders.
Appraisers have fulfilled rigorous educational and experience requirements and must adhere to strict standards and a code of professional ethics.
Qualified State Certified appraisers bring knowledge, experience, impartiality and trust to the transaction. In so doing, they help their clients make sound decisions with regard to real property.
Most appraisals are reported in writing, although in certain circumstances, an appraiser may provide an oral appraisal.
A written appraisal report generally consists of: a description of the property and its locale; an analysis of the "highest and best use" of the property; an analysis of sales of comparable properties "as near the subject property as possible"; and information regarding current real estate activity and/or market area trends.
The value indicated by recent sales of comparable properties, the current cost of reproducing or replacing a building, and the value that the property's net earning power will support are the most important considerations in the valuation of real property.
A residential or commercial appraisal may be able to assist with the following:
(1) Feasibility studies
(2) Land utilization studies
(3) Expert witness testimony
(4) Supply and demand studies
(5) Market rent and trend studies
(6) Tax assessment review and advice
(7) Estate planning and estate settlements
(8) Advice in eminent domain and condemnation property transactions
(9) Cost analysis, for example, what will be the financial return on remodeling.
(10) Dispute resolution-including divorce, estate settlements, property partition
suits, foreclosures, and zoning issues.
The following questions
would be appropriate when selecting an appraiser:
How long have they been in practice?
(1) Are they licensed or certified in the state in which you live?
(2) Are they familiar with market property in this neighborhood?
(3) How much of experience do they have with this type of property?
(4) What types of clients have they had (homeowners, estates, lenders, relocation
companies)?
Appraisal Values
To determine or 'estimate the value' of your home through comparison methods. The Value of a Property is determined by 'FOUR elements':
(1) Demand,
(2) Utility,
(3) Scarcity, and
(4) Transferability.
Formal and Informal Appraisals
The difference between both appraisals involves six processes, which include:
(1) Defining,
(2) Formulating,
(3) Collecting,
(4) Analyzing,
(5) Arriving at an amount,
(6) Reporting.
All of these methods must be used in determining a report. Whether it is Formal or Informal, their is a method to the madness.
Comparable Properties
Your home is compared to others 'Comparable Properties' that are included in the:
(1) Same neighborhood,
(2) For approximately the same square footage, and
(3) The same number of bedrooms, and
(4) The same number of bathrooms, etc,.
Their are factors in comparing land, the neighborhood in where the land is located and fixtures that are part of a home or attached to the property.
Remember that value is what a person may believe it to be, it is not necessarily what it is - over improvements may not necessarly make your home more valuable than a similar home down the street without any improvements - nevertheless - value is always subjective if a buyer believes that it's worth more and is willing to pay more for your home than the neighbors home - than that's all that matters!
A common misunderstanding is that the value of a property has nothing to do with what is owed on it, but what it is worth in comparison compared to similar properties and what a buyer is willing to pay for the property.
Appraisals Are Required When
Appraisals are required when a buyer purchases or seller refinances:
(1) Sells his/her home,
(2) Purchases a home,
(3) Gets insurance on a home,
(4) Exchanges his/her home for one of like value,
(5) When one manages or leases a home, or
(6) Finances or refinances a home.
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