Home appraisals can be an integral part of the home buying process. Most mortgage lenders require a home to be surveyed by a licensed professional before they will sign off on a home loan, and the process can uncover potentially costly repair issues that may affect a home's value.
Certified appraisers typically use one of two methods when it comes to determining the value of a home - the sales comparison approach and the cost approach.
New homes are usually valued using the cost approach. The process takes the cost to rebuild the structure into account and also looks at the value of the land. Depreciation on both the land and the home are then estimated and accounted for in order to determine the total worth.
Appraisers may also employ the sales comparison approach in their attempts to place a value on a piece of real estate. This method compares the home in question to other comparable properties in the area. A number of recently sold properties with similar features may be used in the comparison.
In addition, appraisers will consider the home's size, features and other amenities in determining worth. Lot size and interior square footage are factors, as are the home's style and condition. Additional features like fireplaces, pools and garages may also impact a home's appraisal.
Most home inspections will begin with a physical examination of the property. An assessor will tour a home looking for structural issues and to check on the state of the home's systems, such as plumbing and heating configurations.
Appraisers will also gather a myriad of documents to help them in their efforts. Courthouse records, real estate documents and a history of repair permits - this information will help them to create an appraisal report that explains how they came to their determinations.
The report will include a list of any home improvements that have been undertaken in the past and things that need to be improved upon. Neighborhood features may also impact the value, and local development and rural acreage will be taken into account.
Typically, an appraiser will have to do all of the leg work to gather the necessary documents and records - hopping between courthouses and city halls to gather the information required. However, CRS Data can save surveyors the trouble of running around town to collect everything they need.
Its tools provide information on property tax records, sales and mortgage history, flood maps, census demographics and more all in one place. The online resources are also useful for real estate professionals looking to get a broader background on the properties they are helping clients to purchase.
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KIM MOYER - Keller Williams Realty