Tuscaloosa Real Estate FAQ: Appraisal- What is it? My clients and customers asked many similar questions. Many ask about appraisals, how an appraisal can help them sell their Tuscaloosa home or buy Tuscaloosa real estate. Here is a short guide to UNDERSTANDING THE APPRAISAL PROCESS
BEFORE THE APPRAISAL INSPECTION
WHY IS A REAL ESTATE APPRAISAL NECESSARY?
Usually the appraisal is part of a loan application where real estate is being used as collateral or security for a loan. The lender needs an accurate and unbiased estimate of value, which can be used in the loan application process.
WHAT DOES A REAL ESTATE APPRAISER DO?
A real estate appraiser values real property (land, houses, buildings, etc.), not personal property (cars, jewelry, boats). The appraiser determines the physical characteristics of the property to be apprised and estimates the value based upon three common approaches to value- market, cost, or income.
FOR WHOM DOES THE APPRAISER WORK?
The appraiser usually works for an appraisal firm; sometimes he or she is self-employed. The lender hires the appraiser, so the appraiser works for the lender in seeking a fair value.
IF I PAID THE LOAN APPLICATION FEE, DOES THE APPRAISER WORK FOR ME?
This is a common misunderstanding. The appraiser works for the Lender. The borrower or purchaser is the customer. As a professional, the appraiser needs to extend courtesy and respect to the customer. However, the appraiser is not employed in any way by the borrower or anyone else besides the Client, the lender, and cannot discuss specifics of the appraisal with anyone but the Client. Your lender will discuss the Appraisal Report with you once he or she receives this report.
ARE APPRAISERS LICENSED?
Yes, appraisers in Alabama are licensed.
THE APPRAISAL INSPECTION
The physical inspection of a typical property usually takes between fie and fifteen minutes. Sometimes, an inspection can take longer if the house is difficult to measure or has some unique features that require additional investigation by the appraiser. After the initial inspection of the property, the appraiser spends time touring through the neighborhood or area. The purpose of this tour is to search for other properties that are similar to your property that have sold within the last year. When the fieldwork is finished, the longer work of completing the report is done in the appraiser's office. The report usually is about ten pages long and takes over four hours to complete.
WHAT DOES THE APPRAISER CONSIDER IN DETERMINING THE VALUE OF MY PROPERTY?
The appraiser measures the house from the outside to determine square footage. This external measurement is standard throughout the industry. Usually, no interior measurements are required. The appraiser takes notes concerning the features of your house such as room layout, number of bedrooms, baths, etc. The appraiser also makes a determination of the general condition, appeal, and functional layout of your house. All of these items are taken into consideration in the appraisal report.
DOES THE APPRAISER DO A WHOLE HOUSE INSPECTION?
NO. The appraiser is not a whole house inspector, engineer, architect, electrician, plumber, HVAC technician, or contractor. The appraisal is not a guarantee of condition. You are encouraged to seek the advice of experts if you have any questions about the mechanical aspects.
AFTER THE APPRAISAL INSPECTION
WHAT'S MY PROPERTY WORTH?
It is common for the owner to ask this question as soon as the appraiser has inspected the property. The truth is at that time, the appraiser doesn't know what the property is worth. The inspection is the first step of many the appraiser will go through before a value is determined. Again, your lender, who is the Client, will call you to discuss the appraisal report once he or she has had a chance to review it.
WHAT AFFECTS THE VALUE OF MY PROPERTY?
The sales of similar properties in your area directly affect the value of your property. Items that usually contribute to value are room additions, such as bedrooms, bathrooms, garages, etc. Items that usually contribute very little to value are swimming pools, finished basements, landscaping, new roofs, new furnaces, etc.
DO I GET A COPY OF THE APPRAISAL?
If you are the borrower and the appraisal is used in granting credit, you are entitled to a copy of the report. This copy can be obtained from your lender by written request. A copy is given as part of fair credit guidelines and should not be relied upon by the borrower. The report will have specific terms and limiting conditions posted. It is essential to read those conditions