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Property Appraisals and Real Estate Values
The property appraisal is a necessary and informative tool when buying or selling real estate.
It will give the prospective buyer as well as the seller and lender a most accurate overview
of a property's current market value.
Although some lending institutions employ in-house appraisers, most often property
appraisals are done by independent licensed property appraisers who are familiar with
local real estate values. In any event, no commercial lender will consider
financing without a current appraisal.
Banks and lenders are not the only organizations that use appraisals in their business.
Title agents, real estate trusts, attorneys, mortgage brokers, insurance companies as well as private
individuals are all in need of an appraisal from time to time.
When inspecting a property for appraisal, many things are taken into consideration.
Street appeal such as cute lawn ornaments count for nothing towards value. However, a fresh
paintjob, sprinkler system, gutters, driveways and fencing will be considered in the
final results.
Property appraisers must constantly stay in touch with recent real estate sales in their area of
business. To do so, many are members of local real estate boards and/or subscribers to
various trade publications. Other sources of valid real estate transactions include
courthouse records which will include those sales that were of a private nature, not
brokered through an agency, and therefore not included in multiple listing service reports.
The property appraiser must justify his work and be able to back it up with valid data.
He will base his value following strict guidelines regarding recent comparable sales. Such
properties must have sold within a given timeframe and be situated in as near a location to
the subject property as possible. These sales would ideally be the same age and size and
in similar condition. However, this is mostly not the case and educated value adjustments
have to be made for the differences.
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