What is an appraisal?
An appraisal is a written analysis of the estimated value of your property. A qualified appraiser who has knowledge, experience, and insight into the real estate marketplace prepares the document. This ensures that you’re paying fair market value when purchasing a new home, and ensures that you get the most accurate market value in determining equity for refinancing. Typically, an appraisal is required in order to close a loan.
By Victor Wiener Executive Director Appraisers Association of America December, 1994 “What is an appraisal?” is a question frequently asked by clients of appraisers as well as appraisers themselves. Although one can find many different definitions when consulting the dictionary, the appropriate way to define the term is to consult professional appraisers. Most will agree that an appraisal is a statement of value which is arrived at through a thorough analysis of the market in which an object is normally sold. Most appraisers will also agree that an appraisal is a written document and as such will assume legal significance and may ultimately be called upon to be defended in a court of law. The appraisal is a valuation in which a diverse number of factors are considered by the appraiser and analyzed in written form. These factors include the purpose of the appraisal, the market in which the object is being valued, the market in which the object was purchased, the market in which the clie
With the loan conditionally approved and a purchase offer accepted, you must make sure that an appraisal is ordered from a lender-approved provider. The appraiser’s report will evaluate the property in terms of its replacement cost, marketability and physical condition to guarantee that, in the case that it has to be foreclosed, the lender may re-sell it quickly with minimal loss. An appraiser’s report relies on several techniques to determine value, but the most common and important means of valuation involves the assessment of comparable properties. The appraiser’s task is to examine all the data on recent, nearby sales, and to select the three, four, or five properties that most closely mirror the property being appraised. When this is done, the appraiser tries to determine a fair price for the subject property, accounting for differences in the size and features of among the comparables. Other factors that could impact value include age, condition, desirability of location, and ame
