A Real Estate Appraisal is the practice of developing an opinion of the value of property, or what is commonly called “market value.” Primary goal is to determine the value of the home to make sure that you are not over paying or under paying for a property. Real Estate Appraisals are required on a property whenever it is financed. Few people really know how appraisals fit into the home buying process.
People need to understand:
1. What appraisals are?
2. Who does them?
3. Why they are required?
A Real Estate Appraisal inspection is NOT the same thing as a Home Inspection. A Home Inspection is much more in-depth and designed to find things wrong with a home. An appraisal will take obvious defects into account, but not nearly as much as a home inspection.
Three main parts to a Home Appraisal:
1. The inspection – a licensed appraiser comes to the property and inspects it to determine fair market value
2. Comparables – after the inspection, the appraiser researches similar homes in your area and compares recent sales to determine market value.
3. Final Appraisal Report – using the data gathered from the inspection and comparables research, your appraiser issues a final appraisal report.
Here are the things to know about a Real Estate Appraisal Inspection:
1. The appraiser confirms that the property exists and is in livable condition.
2. The appraiser confirms reported square footage.
3. The appraiser checks all rooms for obvious damage that could affect value.
4. The appraiser will verify reported upgrades (you’ll provide that information prior to the inspection).
5. The appraiser will note all permanent features to a home that could affect value. Like the built-in appliances in the kitchen. Removable items are not included in appraised value.
6. The appraiser will check the basement for updates and finishing, but NEVER include it in sq. footage. Updated basements can increase a property’s value, but they can’t be included in sq. footage.
7. The appraiser verifies there is a working furnace and air. But remember, they don’t test a furnace the way a home inspector would. They just confirm it exists and appears to work.
8. The appraisal verifies the number of bedrooms. To be counted as a bedroom, the room must have closets and windows. Keep in mind: DON’T start a room project you don’t plan on finishing before the inspection. It may hurt your value.
9. The appraiser checks the front and back of the house and measures all land area on the property
10. Finally, remember: What you spend on updates may or may not raise the value of your home a by the same amount.
Don’t worry about how clean your house is. Appraisers don’t take that into consideration. But do cover over cracks in walls or finish any minor retouching you may have started. Make your home look as finished and as nice as possible; don’t leave any unfinished painting or renovation jobs in limbo. Get those done and you’ll do your appraisal a favor.
Please feel free to begin the process at Abernethy Properties or see what your home is worth at Carolinas Home Values. Please don't hesitate to let me know how we can help you with all of your Carolinas Real Estate needs.
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