First of all, let me say.... I am NOT an appraiser... I am a Realtor. There is a difference.
As a realtor, I've generally taken the approach of allowing the appraiser to do what they do best and APPRAISE the property. Arguably, I find it best to stay back and get the heck out of their way. But what happens if you don't like the results of an appraisal? As a consumer, if you're not happy with your appraisal, you could always challenge the appraisal. After all, you've paid for this service. Perhaps an even better option would be to have a second independent appraisal conducted with a different appraiser. One of the greatest lessons Ive learned since entering real estate is having a higher level of compassion for appraisers. I truly believe since the housing crash back in the early 90's appraisers are facing greater obstacles than ever before. (But that's a whole other blog). Why compassion? The answer is the based on the EMOTIONAL reactions that the appraisal results typically elicit. Client responses to the appraisal reports generally come in one of two forms. High of the High or Low of the low! Rarely, in between. One response we see is, PRAISE! The buyer is ecstatic that they're getting a deal on a home that has appraised for more than they anticipated. The second response is, errrrrrrrrrrrrr....(insert grumpy voice and a few choice words). This reaction is generally followed by a tirade of how in the world could this appraiser think my property value is this low or did they NOT notice that my home does indeed has a whole second floor?
Emotional responses are fine. After all, for most people our homes do have emotional ties. The important part of real estate to remember however is that it is imperative that agents as well as appraisers meet state and federal standards. In the case of the appraiser, he/she must adhere to the Uniform Standards of Professional Appraisal Practice. This is the governmental board that regulates all appraisers.
The average real estate transaction from start to finish generally takes a 30-45 day period. This is barring no financial or home inspection issues that might hinder closing. With a financial contingency in place, the buyers lending institution will order an appraisal of the sellers home. This is conducted since the buyers lending institution will not loan the buyer money for a home that is deemed less in value than the agreed upon purchase price. For example, if the purchase price is agreed upon for 250,000 and the property only appraises for 175,000 then the buyer/seller will have to look at additional options since the bank will not loan money for a home deemed less than appraised value.
After the appraisal and depending on the appraiser, the appraisal results will then be presented to the buyers lending institution within roughly 3-7 days. This report is called the Uniform Residential Appraisal Report. One note to keep in mind to sellers, since this report is paid for by the buyer, the results are confidential and the buyer/buyers agent does nothave to disclose the EXACT appraisal amount of your home. Ultimately, this report identifies and includes the following:
First, the report will identify the real estate and the real property being appraised. Second, the report will state the purpose and the use of the appraised property. Third, the report will define the value to be estimated. Fourth, it will state the date of the value and the date of the report. Fifth, it will state the extent of the process confirming, collecting and reporting the results. Sixth, the report will list any limiting conditions or opinions that affected the appraisers conclusions of value. Lastly, the appraiser will explain the what appraisal procedures he/she followed and give any additional supporting documentation.
Hopefully, this will give you a general idea of an appraisal report. As of recent, I have found, in my area at least, we are experiencing a spike in a sellers market. Appraisals are typically coming in higher than I have expected. Comparisons are constantly changing. Value is constantly changing. All these are factors to keep in mind. As you begin your journey in buying and selling keep in mind that the appraisal amount on our home is just a number. Yes, we hope to make real estate transactions work but values are constantly changing. What might be consider of high value now, maybe not so good later. As an appraiser friend of mine once said. You..... the buyers and sellers, are the single best comparison out there. What you and others are willing to pay, gives us the best idea of value.
Author:Lanna Smith Phone: 615-477-1667 Dated: July 21st 2013 Views: 8,025 About Lanna: ...
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