When you buy or sell a home, it is important to seek the services of a third party in order to provide an excellent real estate appraisal. Regardless of what the other party claims about using their person, you would rather pay more and be sure the results are true.
It is often the case that an appraiser will need to be called in as an expert to testify about the valuation of a piece of property after a judgment has been made. As a matter of fact, determining the value of the realty underwriting the loan is analogous to shooting a moving target. The ever decreasing value of properties is only one factor that exacerbates the risk for lenders; the financial stability of the borrower is another factor in these trying times. Typically, residential appraisals depend on one of two methods of determining the value of an asset, the direct sales comparison approach, and the cost approach.
In the cost approach, the price of replacing the building as well as making certain improvements is estimated, where the value of the site is being added, and the estimated depreciation is deducted. When buying a home, it is important that you order an appraisal and this is because real estate appraisers offer reports about the close estimate of a property’s true market value.
Appraisers are licensed people that will estimate the true market value of the property. 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.
This method is often used in new properties and this enables the appraiser to know how much money is used to build the house. Loan institutions would not want a property that is difficult to sell if ever your property has been foreclosed. If you want the mortgage, you can offer to make larger down payment and in this, you should be sure that you could afford to make larger down payment to make the deal work.
You can also ask the lender for another appraisal, by using a new appraiser or asking the original appraiser to take another look at the property. Also condition the condition of the property before anything else.
Try to look for yourself at the location, the condition of the foundation and you can seek the services of an independent home appraiser in order to evaluate the true market value of the property prior to applying for a mortgage. Make sure you research well on these companies to make the right choice.