Real estate appraisal is the practice of having a professional appraiser evaluate a property to form a professional opinion of the true value of the property. In this regard, the appraisal report is used as a marker or indicator of the actual value of the property for purposes of lending against the property, selling the property, buying the property or tax evaluation or assessment.
It goes without saying that utmost accuracy in the appraisal process should be maintained. However, herein we will take a look at the benefits that you accrue from having an accurate appraisal conducted.
For property sellers, accurate appraisals give them a firm basis for setting a fair price of for their property. An accurate assessment negates the possibility of overpricing your property, resulting in reduced probability of attracting customers.
It also reduces the possibility of under-valuing your property thus ensuring that the seller gets returns that reflect the true value of the property.
An accurate appraisal ensures that the property owner pays appropriate property taxes to the local government.
If the value of the property has fallen in recent times, it pays to have your property accurately appraised. After that, you can use the appraisal report to have your property reassessed to a more appropriate tax value, thus reducing your tax burdens.
Benefit # 3
If you intend to purchase any property, an accurate appraisal ensures that you get a good deal. Understanding the true market value of the property in question goes a long way in helping you negotiate a fair price.
It is typical for property owners to value their property subjectively due to the emotional attachment they have to the property. Accurate appraisals ensure that the price you pay for a property is arrived at objectively. It also ensures that subjective qualities play as little as possible in the value of the property.
Benefit # 4
Finally, having an accurate appraisal conducted is important in when borrowing against one’s property. It gives the borrower a clear value of the property, unlike some of the appraisal reports that the lenders push to be used.
It is common for some lenders to inflate the value of the property or undervalue the property, depending on their endgame. An accurate appraisal report will protect you tremendously while borrowing against your property.
Elements that characterize accurate appraisals to look for
An accurate appraisal should contain at least three basic parts:
The Inspection – Inspection phase is the bit where the appraiser, who should be impartial and not interested in the outcome of the process, inspects the size of the property, the function, the condition and quality of the house.
The Comparison – The comparison bit is where the appraiser researches the value of properties in the vicinity as well as the value of recent sales of properties within the vicinity.
The Final Report – This is the final bit where the appraiser uses the information gathered from the two-step above to form an opinion on the value of the property as well as issuing the appraisal report.