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COMMON QUESTIONS

Everything You Need to Know

Signing a Contract

DO I NEED A REAL ESTATE APPRAISAL

Whether you need a real estate appraisal depends on your specific situation. An appraisal is a professional, unbiased estimate of a property's market value and may be required for several reasons:

  • Buying or Selling a Home: Lenders typically require an appraisal to ensure the loan amount does not exceed the property's value.

  • Refinancing a Mortgage: Most refinance applications require an updated appraisal to confirm current market value.

  • Tax Assessment Appeals: If you believe your property tax assessment is too high, an appraisal can serve as supporting evidence.

  • Estate Settlement or Divorce: Appraisals are often necessary to fairly divide property assets.

  • Home Equity Loans or Lines of Credit: Lenders may request an appraisal to determine available equity.

plans

HOW ARE APPRAISALS DEVELOPED

Appraisals are developed by licensed or certified appraisers using standardized methods to estimate a property's fair market value. The process generally involves the following steps:

  1. Property Inspection: The appraiser inspects the property to assess its condition, features, size, and any improvements or issues that may affect value.

  2. Research of Comparable Sales (Sales Comparison Approach): The most common method, this involves comparing the subject property to similar properties ("comps") that have recently sold in the area. Adjustments are made for differences such as size, location, and amenities.

  3. Cost Approach (when applicable): This estimates the cost to rebuild the property from scratch, minus depreciation, and is often used for newer or unique properties.

  4. Income Approach (for income-producing properties): This method estimates value based on the income the property generates, typically used for rental or commercial properties.

  5. Reconciliation: The appraiser weighs the results of the different approaches (if more than one is used) to arrive at a final opinion of value.

Appraisals follow guidelines set by the Uniform Standards of Professional Appraisal Practice (USPAP) to ensure accuracy and impartiality.

Suburb Houses

WHAT SHOULD I DO TO PREPARE FOR AN APPRAISAL

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Ensure your home is accessible (inside and out), and list any recent upgrades, repairs, or improvements you’ve made.

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