Real Property Appraisal: A primer
Maybe you are looking to appraise your dream single family home or maybe you are looking to buy a multi-family investment property. Either way, this transaction is very important to you. The best way to make your way through the entirety of the process is to make sure to find the right experts for each step of the process.
Each team member plays an important role in this process. A real estate professional is the face you will see the most. Next, the bank will provide the capital necessary to finance the transaction. To be sure that all of the step of the process have been properly completed and that the home has a clear title, the title company steps in to play their role.
Is there a person who makes sure that the appraised value matches the selling price? Yes, the appraiser. Throughout the process we keep buyers and sellers in the loop regarding the unbiased market value of the property. The Home Appraising Group will send one of our certified appraisers to stay on top of the project and keep you informed.
INSPECTING THE SUBJECT PROPERTY
First we will inspect your property in order to gather the information we need to determine the current status. One of our pros will come to you and walk through to check the numbers of bedrooms and bathrooms, special features of the property, all the while making note of the condition of the property to be sure the buyer gets what they expect from the property. One of the ways some inspectors will show the true size and layout of a home is to create a simple sketch of the floor plan. Our job is to find any defects, amenities or other details that will impact the valuation of the property.
After the walk through of your property our experts will use multiple analytical approaches to arrive at the fairest valuation of your property. Most often they apply a paired sales analysis in combination with a replacement cost calculation. In the case that it is rental, they will also use an income calculation.
ANALYZING COMPARABLE SALES
Our appraisers understand your community. They know what buyers are looking for in a property. They begin by looking at recent home sales of properties similar the one being appraised. Then adjustments are made based off of the specs of the property. If the property has a high number of the characteristics local buyers want, this will add significant value to the property. Our expert appraisers can use the comparable sale prices combined with your homes amenities and find a valuation that is fair.
- In the case that a comparable home has unobstructed views of a golf course and the subject home is surrounded by neighbors on all sides, the appraiser might consider the value of these views when comparing the homes value to the sales price of the comp.
- The opposite would also be true. If the subject home possesses spectacular views, this would add value to the comp’s selling price, assuming that home had views of only neighbors.
The Home Appraising Group prides itself on fully appreciating the value of real estate details in the state of Pennsylvania. Using this value approach is often applied when an appraisal is being conducted for a home purchase.
When using the cost approach an evaluator looks into regional labor costs, construction costs and other relevant fees to calculate the price of building a similar home. That number could be used as a maximum listing price. This method applies to some situations, but not all.
VALUATION USING THE INCOME APPROACH
In the case that an area has a fair number of rental properties, you can find valuation of a house by using this data. An evaluator can look at the revenue generated by the property in question and compare that information with income earned by other rentals.
ARRIVING AT VALUE CONCLUSION
All of this information is then combined to create a final report – highlighting the estimated market value of your property. This is an estimate, rather than a prediction of the exact sale price. The valuation is helpful not just for a property owners purposes, but also for the lender who must determine what a reasonable loan may be for the property in question. There are many situations of both the buyer and the seller that can potentially increase or drop the final sales price. In the end, an appraiser from the Home Appraising Group promises that you receive the fairest assessment possible for your properties value.