How To Proceed With The Appraisal Process

1. How To Proceed With The Appraisal Process

2. How To Proceed With The Appraisal Process • If you want to live in your dream home, the first thing comes in your mind how to find it? The appraisal process is the process which fulfills your dream in reality. It provides you the worth, or value, of the property, will determine how much a lender is willing to give you to buy that piece of real estate.

3. How To Proceed With The Appraisal Process • To get the financing you need a home appraisal and it is an important step. But sometimes it is a puzzling part of the mortgage process in which the buyer and seller must rely on the expert opinion of the third party about the real estate. A real estate is a report which is consists of expert opinion of a certified, state-licensed professional who determines the property value.

4. Understanding the Appraisal Process • The lending institution through which you are getting your loan will originate a request for the real estate appraisal. The passage of the Dodd-Frank Act has changed the way home appraisals are ordered. There is no contact the lender has with the appraiser until after the work has been performed, so there is no “undue influence” on the appraiser to value the home at a certain price. • Lenders are no longer allowed to choose a specific appraiser. However, you can request a local appraiser who is familiar with the market condition in your area.

6. Appraisal Cost • Traditionally, buyer has to bear the cost of the home appraisal and normally paid at the time of closing as part of the closing cost. • Cost of an appraisal is different with respect to region. For a condo or a single-family home, it ranges from $300-$500. Cost will be higher for complex properties such as multi-unit or rentals. If there are any repairs required and recommended by the appraiser, he must check out and certify completion prior to closing.

7. How the Value of a House is Determined • After finishing the inspection of the home, appraiser pulls recent sales information from public record or MLS. Then they perform a comparison between those homes and your property to check how it will stand in the competition. This is referred to as “Comparable”. This is done in a recently build subdivision where there are fewer house styles to choose from.

9. Calculating Comparables • The appraiser tries to calculate comparables by identifying the closest matches to the subject property. Match has to be as close in proximity as possible. Then checking for how much those home were purchased in 30-90 days duration. • It may not be possible to fine the exact match of the subject property and when this happens, appraiser must consider other factors such as location. Location is the most influential factor of the property value.

10. Calculating Comparables • While the appraiser compares the subject home to the recently sold similar homes, the appraiser can’t go see them because they are no longer on the market. They must rely on the MLS photo as they can’t walk through the home in person. • If you have some information about a nearby home that you feel will affect the sale price of your prospective home, share this knowledge with the appraiser in the written letter.

12. Final Appraisal Report • The appraiser will write up a report and giving their estimated value as they inspected the home and compared it to recently sold properties. This report is consisting of the specific addresses of the homes they used as comparable properties along with description of the actual property, a location map, subject property picture and the current condition of the real estate market.

14. Source: • This content is the property of RE2QA which is a tech company based in United States. They provide Appraisal Management & Review Services.