Real Estate Appraisals
Real Estate Appraisal is a specialized field of real estate valuation. Property evaluation, real estate appraisal or real estate valuation is the procedure of identifying an assessment of value for certain real property. Real estate deals often require complex appraisals as they happen so frequently and each property is unique, unlike stock, which are essentially identical and often happen daily. Valuing a real estate deal requires understanding the legal definition of the property, as well as the local market trends and demands. Appraisal techniques vary and include a market study, data analysis, comparison of similar properties to the one being appraised, and the use of technical and procedural tools and formulas.
In United States, real estate appraisal is one of the most essential and widely applied techniques. In fact, it is a compulsory requirement for all commercial business organizations, and real estate appraisals are the only sure way of evaluating the worth of the subject property. Appraisal is a valuable part of any transaction and it plays an important role in determining whether to go ahead with a deal or not. There are various factors that come into play during the real estate appraisal process and these include market conditions at the time of purchasing, location of the subject property, condition and performance of the underlying assets, knowledge and experience of the seller, lender, and buyers among others. These factors determine the value of the property that should be included in the appraisal.
Generally, it is easier to buy a new home than to repair or renovate old ones, but that does not mean that a buyer can settle for the former rather than the latter. The location and condition of the property are the most important considerations when buying a home, and real estate appraisal is required to determine the value of the property. Comparable homes and their appraised values have proven to be a very reliable guide when making a decision to buy a particular house. A buyer who plans to buy a property that is comparable to another will be able to make an informed decision. This will help him get the best deal for his money.
Home appraisals are performed by a lender’s real estate department, or by certified appraisers hired by the lender. A buyer can perform his own real estate appraisal, but he will not know the details of the comparable homes, the lender’s requirements, or the procedures involved. Such inspections can be done easily by the buyer himself, but he should understand the basic principle of appraisal in order to make an informed decision.
It is essential to note that real estate appraisals cannot be performed by anyone who is not qualified and licensed. There are some exceptions, such as if the person is working for the lender in charge of purchasing a property and if he is authorized to do so. However, these exceptions are very rare. The most important factor is that a licensed appraiser must be hired. A licensed appraiser must have gone through the appropriate training and he must have the appropriate authority to give the real estate appraisal. Appraisals are also usually accompanied by clauses stipulating that the buyer will be liable for any discrepancies that arise from the appraisal.
A buyer can hire an appraiser on his own or he can hire a licensed realtor to do the job for him. Most buyers prefer to hire a realtor, because he has greater access to details regarding the property value and the exact price range that the buyer can afford. If the seller will not allow this, then the buyer might want to do a side-by-side comparison with another person who will have similar means and resources and who will also be willing to sell the property at a lower price.