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. If you’re a seller, house appraisal can mean finding out that the value of your property has gone up as you were residing in it, or that the value appraised exceeds the mutually agreed price.
A house appraisal can mean bad news too when you discover that the value of your house falls under the price that you wanted, but it’s always good to be aware of the facts.
Real Estate Appraisers and the Appraisal Process
Appraisals are conducted by professional appraisers who possess crucial local area knowledge. Appraisers often undergo intensive training and testing and must be substantially experienced to do their job well. To remain certified, they must also take ongoing courses that make sure they are abreast with the latest developments in the industry.
However, remember that appraisers are humans and are thus not immune from making mistakes. They are also not all created equal in terms of professional knowledge and experience. Therefore, as a real estate investor or seller, you have to seek opinions form 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. To ensure uniformity, the Fannie Mae Uniform Residential Appraisal Report is the standard form used by all appraisers when evaluating a property. The report should come with an assessment of the property, both internal and external; a street map (should include comparable properties); and finally, the appraiser’s analysis and conclusion according to his expert evaluation.
Hiring an Appraiser
There are usually two ways to hire an appraiser:
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. Take note that in this scenario, the lowest-priced appraiser would likely be hired, negatively impacting your appraisal. Therefore, be ready to pay a bit more for a qualified appraiser.
2. If you are interested to know the value of your house before even putting it in the market, you can do that by connecting directly with an appraiser. Appraisals are crucial as well in cases involving estate lawsuits or settlements.