What Exactly Is A Real Estate Appraisal?

Most people know that an appraisal is part of the home buying process.  Do you actually know what the appraisal consist of?  The official definition of an appraisal is “the process of valuing real property. The value usually sought is the property’s Market Value.  Appraisals are needed because real estate transactions occur very infrequently. Not only that, but every property is different from the next, a factor that doesn’t affect assets like corporate stock.  The appraiser usually provides a written report on this value to his or her client. These reports are used as the basis for mortgage loans, for settling estates and divorces, for tax matters, and so on. Sometimes the appraisal report is used by both parties to set the sale price of the property appraised.”

Each property is unique, even though some of them may be valued at approximately the same price. This is usually because of  location and the condition of the home.  The real estate appraisal will have to be carried out by a certified or licensed professional and it will be written on a standard form. However, each state has its own standards and regulations to follow.  Even though the appraiser will attach a market value to a home, you and your agent can freely determine the list price. If it’s appraised at $180,000, there’s no reason you can’t ask for more. Many people do ask for more on their homes in anticipation of  buyers offering under the asking price.  You could potentially get more or less than the so-called market value.

Of course, the value of a house can fluctuate quite a bit depending upon certain economical factors, such as mortgage and interest rates and the general state of the economy.  We have seen this recently as values of  houses have dropped as compared to recent years.  There could be other factors too.   If your neighbors do not take care of their dwelling and land, it will generally reflect in the worth of the homes near it.  This is why most areas have bylaws that state what people can and cannot have located on their land or grow on it.  However, the items and furniture you have in your home don’t affect the value of it. These are removable items that aren’t considered permanent fixtures.

You may also be wondering what part a real estate appraisal plays in the purchase or sale of a home.  It depends on the region you live in and what the rules, and regulations are. You are best to check with a local realtor or mortgage adviser for the most accurate, regional information.  Keep in mind you will have to pay to have an appraisal performed on a property you want to purchase, in most cases. Remember, the appraisal process is different than a home inspection.  Your appraisal report will include information on the property as well as similar ones. The real estate market in the area is taken into consideration as is the type of area the house is located in.

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