|
|
|
|
Making Sense of the Appraisal Process
One's home purchase
is
the biggest
investment
some
may
ever
encounter.
It doesn't matter if it's
where you raise your family,
an additional vacation home or
a rental fixer upper, the purchase of real property is
a detailed transaction that requires multiple people working in concert to pull it all off.
 |
 |
 |
To learn more about appraising, click here to see a short video or call us today to talk about your specific property. |
|
|
Practically all the people involved are very familiar.
The real estate agent is the most familiar face in the transaction.
Next, the mortgage company provides the money needed to bankroll the deal.
The title company ensures that all areas of the exchange are completed and that a clear title transfers to the buyer from the seller.
So who makes sure the value of the property is in line with the amount being paid?
In comes the appraiser. We provide an unbiased estimate of what a buyer could expect to pay - or a seller receive - for a parcel of real estate, where both buyer and seller are informed parties. A professional New York licensed appraiser from 48 Hour Turn Around will ensure you as an interested party are informed.
Inspecting the subject property
Our first duty at 48 Hour Turn Around is to inspect the property to determine its true status.
We must actually see features, such as the number of bedrooms and bathrooms, the location, living areas, etc., to ensure they indeed exist and are in the shape a reasonable person would expect them to be.
To make sure the stated size of the property is accurate and illustrate the layout of the house, the inspection often entails creating a sketch of the floor plan.
Most importantly, the appraiser identifies any obvious amenities - or defects - that would have an impact on the value of the property.
Once the site has been inspected, we use two or three approaches when determining the value of real property:
a paired sales analysis, a replacement cost calculation, and an income approach when rental properties are prevalent.
Replacement Cost
Here, the appraiser analyzes information on local construction costs, labor rates and other factors to ascertain how much it would cost to construct a property similar to the one being appraised. This value commonly sets the maximum on what a property would sell for. It's also the least used predictor of value.
Paired Sales Analysis
Appraisers become very familiar with the neighborhoods in which they appraise.
We innately understand the value of particular features to the homeowners of that area.
Then, the appraiser looks up recent sales in the neighborhood and finds properties which are 'comparable' to the home in question. Using knowledge of the value of certain items such as
remodeled rooms, types of flooring, energy efficient items, patios and porches, or additional storage space, we add or subtract from each comparable's sales price so that they more accurately portray the features of subject property.
-
Say, for example, the comparable has a fireplace and the subject does not, the appraiser may deduct the value of a fireplace from the sales price of the comparable.
-
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.
At 48 Hour Turn Around, we are an authority in knowing the value of particular items in Middle Village and Queens County neighborhoods.
This approach to value is typically given the most weight when an appraisal is for a home exchange.
Valuation Using the Income Approach
A third method of valuing approach to value is sometimes employed when a neighborhood has a reasonable number of renter occupied properties.
In this case, the amount of revenue the real estate generates is taken into consideration along with income produced by similar properties to determine the current value.
The Bottom Line
Analyzing the data from all approaches, the appraiser is then ready to put down an estimated market value for the subject property.
Note: While the appraised value is probably the best indication of what a house would sell for in an open market, it may not be the price at which the property closes.
There are always mitigating factors such as the seller's desire to get out of the property, urgency or 'bidding wars' that may adjust an offer or listing price up or down.
Regardless, the appraised value is typically employed as a guideline for lenders who don't want to loan a buyer more money than they could recover in the event they had to sell the property again.
At the end of the day: An appraiser from 48 Hour Turn Around will guarantee you discover the most accurate property value, so you can make profitable real estate decisions.
|
|
|
|
