Real Estate Appraisals
One of the most critical parts of getting a mortgage is Appraisal. The purpose of an appraisal is to confirm the sales price for the lender.
An appraisal is a professional estimate of the value of the property that you are planning to purchase.
According To Wikipedia:
Real estate appraisal, property valuation or land valuation is the practice of developing an opinion of the value of real property, usually its Market Value.
The need for appraisals arises from the heterogeneous nature of property as an investment class: no two properties are identical, and all properties differ from each other in their location – which is one of the most important determinants of their value.
So there cannot exist a centralised Walrasian auction setting for the trading of property assets, as there exists for trade in corporate stock. The absence of a market-based pricing mechanism determines the need for an expert appraisal/valuation of real estate/property.
f the appraiser’s opinion is based on Market Value, then it must also be based on the Highest and Best Use of the real property.
What Do Appraisers Look For When Determining A Property’s Value? -
Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property.
A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection.
However, the appraiser actually already has a good idea of the property’s value by the time an appraiser they have scheduled an appointment to stop by the property.
Understanding The Difference Between A Neighborhood Comp vs Actual Appraisal -
Why is there such a difference between what my appraised value is and the price similar homes are selling for on my street?
It’s a great question, and you don’t have to be a mortgage professional or a real estate agent to understand the answer.
The distinction lies in the purpose of the two valuations and who is responsible for creating them.
Tudela-MacArthur
301-509-5111
