Monday, November 28, 2011

Learn About The True Facts Of An Appraisal

By Ron Darby

Most novice homebuyers put too much faith into a home appraisal. To the novice homebuyer, he or she unquestioningly accepts this property value as set in stone.

Homebuyers tend to place greater emphasis on a written appraisal than on what they're explained to in person. If a seller is listing their house under the value suggested by a written appraisal performed on the house, she or he can convince you their listing price is really discounted.

Be careful of this scheme if a seller or real estate agent tries to impress you with how low the listing price is. While the possibility exists a property can be listed at a bargain price, a greedy seller or agent could present an inflated appraisal to impress you into thinking you're buying a bargain priced property. If you encounter this type of situation, here are some facts you need to know about:

-Appraisals are time dependent. They are only precise at one specific point in time. Be sure to check what date the appraisal was performed. If the real estate market place is actually fluctuating, an appraisal a month or two old could be already outdated.

-When were the comparable properties sold? The most important feature of the appraisal is the sales date of comparable home sales. An appraisal is based on the current selling price of homes in a community. You want these sales to be less than 90 days. If the local real estate market has been slow, an appraiser may need to go back six months to a year to obtain proper sales data. The older the sale, the less accurate the value in determining today's value.

When on appraiser wants to make use of older comparable home sales, she or he needs to make adjustments for the price. To adjust recent home sales information, an appraiser ends up estimating the worth of the house.

It's essential to keep in mind the fact an appraisal doesn't certify the price of a house, nor does it tell you precisely what a house is really worth. It's merely a professional's opinion of what they believe a house is worth in the existing marketplace.

Because of this fact, you'll be able to question the accuracy of an appraisal. Don't let the seller or their agent trick you into accepting their appraisal as the last authority. Use it only as a guide for the price of a home.

An appraisal leaves out important facts. The appraisal is based on the assumption the home is free of any defects or problems. If an appraiser didn't see a defect, his or her report will assume the problem is non-existent.

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