What is an appraisal?

A determination of value of real estate as determined by a professional, impartial, third party in the lending process who is a real estate appraiser.

Why is an appraisal needed?

To protect real estate buyers from overpaying for property as well as lenders from over lending to buyers.

Who needs an appraisal?

Anyone who is buying or selling real estate, anyone needing to settle an estate or for a divorce settlement, for insurance needs, condemnation proceedings, or for equity loans.

Who orders an appraisal?

The lending institution or the purchaser may request a real estate appraisal.

Who pays for the appraisal?

The buyer either directly or indirectly in the closing costs.

How long does an appraisal take?

An appraisal requires a physical inspection of the real estate property which may take between 25-30 minutes, depending upon the size and complexity of the real estate.

After the initial inspection, the appraiser must spend time touring the neighborhood or area to search for comparable sales. These other properties must be similar to the property being appraised and must have sold within the last six months.

The appraiser then completes the report which can take from 1-3 days.

What is Market Value?

Market value or fair market value is the most probably price that a property should bring (or will sell for) in a competitive and open market under all conditions requisite for a fair sale, with the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue outside conditions.

What information should I have available for the appraiser?

If available, the following items will help your appraiser provide a more accurate appraisal in less time:

• A survey of the house and property
• A deed or title report showing the legal description
• A list of personal property to be sold with the house is applicable
• A copy of the original plans and specifications
• The date and purchase price you paid when you purchased the property
• A list of recent improvements and cost
• Any other information you feel pertinent.

What are the methods of appraising?

• Income approach: for income producing properties
• Cost approach: determines the cost to build today less deprecation.
• Comparison approach: Compares subject's property to other similar homes that have sold within the last six months.

Why should you consult an appraiser about For Sale by Owner Properties?

In most cases, For Sale by Owner (FSBO) property owners do not know the value of their property.