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- What is an appraisal?
An appraisal is an opinion of market value as of a certain date, made by a state licensed or certified appraiser.
- How does the appraiser determine the opinion of market value?
The appraiser will research a subject property and research and analyze the real estate economic condition in the subject area. Data related to the subject property will be gathered to support its identification. The general neighborhood or the market area of the subject property will researched for recent sales to identify the current status of the real estate market economy. A site inspection will then be carried out and the real estate market may be further researched if the subject property indicates variation from the originally known data. Then, a report will be prepared and forwarded to the client.
- What will the appraiser do during the property inspection?
The appraiser will take exterior photos and measure the structure's exterior to compare the size with the official records (the appraiser does not inform the assessor of any variances, but will comment to the client if any are observed). An exterior and interior inspection will be made and the appraiser will note the room layout and determine its functionality. On completion, the appraiser should discuss any updating, remodeling, repair or on-going maintenance that has been carried out on behalf of or by the homeowner.
- What can the homeowner do to help make the inspection go quickly and smoothly?
Make sure that the appraiser has easy access to all areas of the exterior and interior of the dwelling so he or she can take accurate measurements. Items of assistance can include: trimming any bushes and moving any items that obstruct access.
- Why would a person need a real estate appraisal?
One common reason is for real estate and mortgage transactions. Other reasons include: to settle an estate, to settle a divorce, to settle property litigation, and to determine value for insurance matters.
- Who can use the appraisal?
Whoever orders the appraisal generally has control of the appraisal. In addition, the appraisal report itself will contain verbiage indicating who can be the users of the report. Under federal law, the homeowner is entitled to a copy of the appraisal report. This is to be provided to them by the lender, bank or broker. Legally, the appraiser can only provide the appraisal report to his or her client, not to the homeowner. If the homeowner ordered the appraisal for legal or private matters, he or she would be the client and would have rights to the appraisal.
- Who pays for the appraisal?
Federal and state law dictate who is responsible for payment of the appraisal report. In some instances, the borrower will pay for the appraisal either directly (COD) or as part of the closing costs. However, in all instances, the client is responsible for payment.
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