Appraisals are done often in real estate and are a vital part of determining property value. Knowing the basics can be beneficial no matter what stage of property ownership you fall into.
How does an appraisal work?
An appraisal is done by a licensed professional to thoroughly examine a property to figure out its value. During the appraisal process, the appraiser inspects the structural quality, comparable local homes for sale on the market, checks for safety hazards and more to determine the property value.
What fails a home appraisal?
If an appraisal comes back low, do not fret, as there are several options to fix the issue. First, it’s vital to determine the cause of the low appraised value. This may include figuring out if recent data was used in relation to the local comparable properties, if repairs need to be done or if market conditions are at play.
Things such as a hot real estate market can put a strain on local appraisers, so sometimes in these conditions the job is rushed - not giving an accurate estimate.
What are the three types of appraisals?
There are three main appraisal approaches used in the world of real estate. These methods include:
- Cost approach: The cost a buyer would pay for a property should be equivalent to the cost of building a similar structure.
- Sales comparison: Property value is determined by comparing similar local properties in a similar real estate market.
- Income approach: Investors estimate the income a property could potentially bring in to see if it’s worth funding.
If you feel like an appraisal is incorrect, it’s best to do research on the local market and work closely with an appraiser for the best results.
About the Author
Taylor Stewart
Taylor Stewart was born and raised in Richmond, Va. He attended Elon University on a baseball scholarship, but after suffering an unlikely injury, he was forced to give up on his dreams of making it to the big leagues.In 2006, Taylor moved to Bonita Springs, FL to pursue a career as a Professional Golfer. After traveling up and down the east coast of the United States playing in various golf tournaments on various golf tours, Taylor suffered yet another injury and was forced to change his career plans. Now, as a real estate agent,Taylor as chosen to put the same drive and determination that made him successful in sports, into helping others find their own piece of paradise in southwest Florida. Especially for those living in or looking for that perfect golf community, Taylor is able to guide his buyers and sellers through his expertise of the golf game and southwest Florida golf courses. Taylor is"Your ace in the hole."