Home appraisal will serve a great purpose in the business of buying or selling a home where an expert’s opinion is needed. Most banks will demand a home appraisal that will give the value of the home before going ahead to lend the buyer any amount. Mortgage process isn’t complete and may not even be done if this step is not followed. For a seller who has priced the house at a price higher than what the appraiser has determined, the bank will not lend the money to the buyer the total amount the house cost according to the seller. Every bank will not want to get stuck with a house that is valued less than the amount invested. This appraisals therefore protects both the buyer and the bank.
Every lending institution will provide a list of property certified and licensed appraisers who have worked with the entity. These expert appraisers often do the work with consistent accuracy of the pricing but the amount to be borrowed will depend on the buyer. There are two ways an appraiser can determine the value of the property. Sales comparison approach is one these appraisers use and the other is a cost approach.
The comparison method determine the value of the home by comparing it with the other houses in the neighborhood that were recently sold. The comparison is done on the features of these houses and the one in question. The main things brought onto the table are the lot size, square footage, different components and features of the house.
Cost method is another approach where new houses are valued based on reproduction cost. The idea is this method is the cost that will be required to build a similar house in case the one to be sold was destroyed. After that cost has been determine, the next focus will be on the worth of the land and also the depression value to determine the final price.
A good appraisal report has this content. The report should show in details how the appraiser determine the worth of the house. The method of appraising is described here in details. The report should also contain a description of the house and anything that has be done to make it better. The appraiser should ensure that all the important features are not left out in the description.
The appraiser should include the structural problems, the issues in the basement leaking and foundation. The surrounding neighborhood should also be described in the report. There should be a comparative market analysis to sum up the property valuing. The report should include a photograph or a map of the whole property.