A real estate appraisal is used to help establish the market value of a property. The determined value is based on many factors including location, size, home type, condition of the home, and so forth. Your real estate agent can give you a good estimate of your home’s worth using a comparative market analysis (CMA), but an appraisal is much more detailed and is the only valuation report a bank will consider when you ask to take out a loan.
About Appraisers and Appraisals
- Appraisers are licensed by individual states after completing coursework and internship hours
- Many lenders have an appraiser on staff, or contract with an independent appraiser
- If you are allowed to choose the appraiser, and you choose someone that the lender isn’t familiar with, the results might be subject to review before they are accepted.
- If you choose your appraiser, s/he should be an objective third party
- You will most likely pay for the appraisal when you apply for your loan
What You Will See on an Appraisal Report
- Details about the subject property
- Side-by-side comparisons with three comparable (similar) properties
- An evaluation of the overall real estate market in the area
- Statements about issues the appraiser feels are harmful to the property’s value
- Notations about seriously flawed characteristics of the property
- An estimate of the average sales time for the property
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