House appraisal is professional evaluation that uses official data in estimating the market value of a particular home or investment property. For instance, appraisal can save you from paying $500,000 for a house that is actually only worth $390,000. As a seller, house appraisal can be financially advantageous if it demonstrates that the value of your house has grown over the time you were occupying it, or that the appraised value is more than the agreed price.
A house appraisal can also bring negative news if it proves that your home’s value is less than its selling price, but the point is to know the facts and take logical steps from thereon.
Real Estate Appraisers and the Appraisal Process
Appraisals are executed by certified appraisal experts who are highly familiar with the local area and the local market. Appraisers generally need intensive training and testing and acquire significant experience to be good in what they do. To maintain their status as certified professionals, they also need to enroll in ongoing coursework and never stop updating their knowledge of the industry.
However, remember that appraisers are humans and are thus not immune from making mistakes. Not all of them are also equally adept at what they do. Hence, if you are a real estate investor or seller, you need to consult more than one appraiser. And needless to say, do a bit of research on the appraisers’ backgrounds before working with them.
What a House Appraisal Report Includes
When working on single-family dwellings, appraisers often conduct their appraisals through a residential appraisal report. The Fannie Mae Uniform Residential Appraisal Report is a standard form used by all appraisers for the purpose of uniformity. The report is expected to include an assessment of the property (both interior and exterior); a street map of it and of comparable houses; and the analysis and conclusions of the appraiser based on what he has found.
Hiring an Appraiser
An appraiser is often hired through one of two ways:
1. If you are planning to get a mortgage, the lender or an appraisal company will work with an appraiser to determine the amount that you can borrow on the property. Keep in mind that in such a case, the company will probably hire the lowest-priced appraiser, and this can have a negative effect on your appraisal. So don’t hesitate to pay a little extra if this means hiring a qualified appraiser.
2. If you would like to know how much your house is worth before talking to anyone or even before making a final decision to sell it, you can also hire an appraiser yourself. Appraisals are crucial as well in cases involving estate lawsuits or settlements.