Perhaps one of the most crucial aspects of purchasing a home or an apartment for sale is to know its value. The listing price is a ballpark figure, but may not reflect the true value of a home or an apartment for sale, especially since the seller wants to receive the best price possible. The seller’s real estate agent might also present the case to you that the property in question is “the best deal on the market.” The agent can show you a very; flashy comparative market analysis for the area and “prove” to you that the property is priced to sell. However, that might not be the case at all, especially if home and apartments have changed significantly in the past six months. The only true test of a property’s value is the appraisal. What exactly is an appraisal?
An appraisal is simply an opinion or an estimate that reflects comparable properties or comps in the neighboring area within a set time period plus much more. It differs from a comparative analysis since it takes into account the whole picture and not only prices of comparable properties that have been sold in the area. It looks at such factors as the condition of the home, the location of the home or apartment for sale (i.e. across from a school), any additions or renovations, and how long it takes to sell similar properties in the area. Only after such factors are analyzed does the appraiser complete the assessment.
Is the appraisal field regulated?
Yes. Congress passed a law in 1989 that mandates all states to set up licensing programs for appraisers. These licensed appraisers must also follow the Uniform Standards of Professional Appraisal Practice, which is basically an ethical guideline for the industry. Ideally, the appraiser should not have any connections with either the buyer or seller.
Who chooses the appraiser?
The lender usually chooses the appraiser, though some lenders will allow the buyer to choose a reputable and certified appraiser for assessing the value of the home or apartment for sale. That’s because the buyer pays for the appraiser and might find someone that’s more reasonably priced than the lender’s options, or someone who is available sooner to conduct the appraisal. |
