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What goes into an appraisal?
One's home purchase
is
the most serious
financial decision
most
could
ever
consider.
It doesn't matter if it's
where you raise your family,
a second vacation home or
an investment, purchasing real property is
a detailed transaction that requires multiple parties to make it all happen.
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To learn more about appraising, click here to see a short video or call us today to talk about your specific property. |
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The majority of the parties involved are quite familiar.
The real estate agent is the most familiar entity in the exchange.
Next, the mortgage company provides the money required to fund the transaction.
Ensuring all areas of the exchange are completed and that the title is clear to pass from the seller to the purchaser is the title company.
So who's responsible for making sure the real estate is consistent with the amount being paid?
This is where the appraiser comes in. We provide an unbiased opinion of what a buyer might expect to pay - or a seller receive - for a parcel of real estate, where both buyer and seller are informed parties. A professional Florida licensed appraiser from Aucilla River Appraisals (813)837-2009 will ensure you as an interested party are informed.
The inspection is where an appraisal starts
Our first responsibility at Aucilla River Appraisals (813)837-2009 is to inspect the property to determine its true status.
We must see features hands on, such as the number of bedrooms and bathrooms, the location, living areas, etc., to ensure they truly exist and are in the shape a typical buyer would expect them to be.
To ensure the stated square footage has not been misrepresented and describe the layout of the house, the inspection often includes creating a sketch of the floor plan.
Most importantly, we identify any obvious amenities - or defects - that would have an impact on the value of the property.
Once the site has been inspected, an appraiser employs two or three approaches when determining the value of real property:
paired sales analysis and, in the case of a rental property, an income approach.
Replacement Cost
Here, we pull information on local construction costs, labor rates and other elements to derive how much it would cost to build a property nearly identical to the one being appraised. This value commonly sets the maximum on what a property would sell for. The cost approach is also the least used method.
Paired Sales Analysis
Appraisers are intimately familiar with the neighborhoods in which they appraise.
We innately understand the value of certain features to the residents of that area.
Then, the appraiser researches recent transactions in close proximity to the subject and finds properties which are 'comparable' to the home at hand. Using knowledge of the value of certain items such as
square footage, additional bathrooms, hardwood floors, fireplaces or view lots (just to name a few), we adjust the comparable properties so that they more accurately match the features of subject property.
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If, for example, the comparable property has an irrigation system and the subject does not, the appraiser may deduct the value of an irrigation system from the sales price of the comparable.
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However, if the subject property has an extra half-bathroom and the comparable does not, the appraiser might add an amount to the comparable property.
After all differences have been accounted for, the appraiser reconciles the adjusted sales prices of all the comps and then derives an opinion of what the subject could sell for.
This approach to value is most often awarded the most weight when an appraisal is for a real estate exchange.
Valuation Using the Income Approach
A third method of valuing approach to value is sometimes applied when an area has a measurable number of rental properties.
In this case, the amount of income the real estate yields is taken into consideration along with other rents in the area for comparable properties to determine the current value.
Arriving at a Value Conclusion
Analyzing the data from all applicable approaches, the appraiser is then ready to state an estimated market value for the property in question.
The estimate of value on the appraisal report is not always the final sales price even though it is likely the best indication of what a property could sell for in an open market.
Depending on the specific circumstances of the buyer or seller, their level of urgency or a buyer's desire for that exact property, the closing price of a home can always be driven up or down.
Regardless, the appraised value is often employed as a guideline for lenders who don't want to loan a buyer more money than they could recover in case they had to sell the property again.
It all comes down to this: An appraiser from Aucilla River Appraisals (813)837-2009 will help you discover the most accurate property value, so you can make profitable real estate decisions.
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