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. As a matter of fact, determining the value of the realty underwriting the loan is analogous to shooting a moving target. 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 greatly depend on the property appraisals from state-licensed firms that they trusted to determine the value of an asset.
In the cost approach, the cost of substituting the building and making improvements is estimated, whereby the value of the site is added, and the estimated depreciation is deducted. When buying a mortgage, a lender will require an estimate of the property’s true market value and this is where lenders base the amount of money to lend you.
Appraisers are licensed people that will estimate the true market value of the property. An appraisal report should include an evaluation of the overall real estate market in your area.
An estimate of the average sales time for the property. 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. The accessibility to the property can determine if your property can be sold faster. Also, the maintenance issues with your property pose a very important factor in the appraisal and if the building foundation is crumbling, the appraisal will be low.
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. 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 home appraisers to evaluate the true market value of the property before you apply for a mortgage. A quick search of local property appraisers on Google, Yahoo, or Bing will yield a list of companies in your area.