The Significance of a Real Estate Appraisal
When is a Real Estate Appraisal necessary? If you are planning to sell or buy a property, then it’s crucial that you have an accurate value estimate. In some cases, both buyer and seller are unaware of the true value of a property. They may agree to an initial contract price that’s either too high or too low. In such situations, a real estate appraiser comes into play to determine what a property is actually worth.
Common factors in a real estate appraisal
The value of a home depends on several factors. Location, neighborhood amenities, and size of the lot are all factors appraisers take into account. The location of your home affects its value the most. Whether it is located near a park, school, or other amenities can have an impact on its value. Some things to consider when preparing your home for sale include its curb appeal, its condition, and its proximity to other homes in the neighborhood.
Steps involved in a real estate appraisal
An appraisal begins with research of the home’s market and neighborhood. The appraiser will use comparable sales and government records to determine a fair market value. A lot of information in the MLS is available for free online. For example, a home with a peeling coat of paint will be valued much lower than a similar house with the same condition. In addition, an appraiser must have information about the neighborhood, including nearby homes for sale.
Cost of a real estate appraisal
The cost of a real estate appraisal varies greatly depending on the type of property you need appraised. A single family home will cost between $400 and $500, whereas a commercial property will cost upwards of $10,000. The cost of an appraisal of raw land can range from $1,000 to $3,000, but can climb as high as $8,000 for large tracts of open land. The appraiser will examine each dwelling in the property, as well as outbuildings and other components of the property.
Requirements for a real estate appraisal
In determining the value of a home, an appraiser will use recent sales in the neighborhood and current market trends to determine the correct price. Other factors include the amenities of the home, including square footage, floor plan functionality, and number of bedrooms. A real estate appraiser must also perform a complete visual inspection of the home, noting any conditions that may have an adverse impact on its value. However, some of the most important aspects of a home appraisal are not directly related to its value, but can affect the valuation.
Is a real estate appraisal required by Fannie Mae or Freddie Mac?
For those who have not had a chance to use a real estate appraisal before, you’re in luck. Beginning September 1, Fannie Mae and Freddie Mac will no longer require appraisals for refinancing loans. These new guidelines will save homebuyers up to $500 per transaction, and will speed up loan processing by two weeks. The changes are effective immediately. But what exactly are the new rules?
