What is an Appraisal?

A home purchase is the largest, single investment most people will ever make. Whether it's a primary residence, a second vacation home, land or an investment property, the purchase of real property is a complex one and the buyer and lenders need to know the value of the property is in line with the amount being paid. Thats when an appraisal is needed.

Inspect the Property
An appraiser will first do an inspection of the property being appraised to determine the true status of that property. They will record information about the features of that property, such as the number of bedrooms, bathrooms, square footage and location to ensure their existance and that the condition is suitable for the buyer. Also, the appraiser will include a sketch and layout of the property and looks for any other features or defects that would affect the value of the property.

Cost Approach
An appraiser will determine the vaue of how much it would cost to construct a similiar property based on building costs, labor rates, and other factors. This value sets the highest value the property would sell for.

Sales Comparisons
Appraisers use recent sales in the area to set a value of a property. These sale prices are used as a basis to begin the sales comparison. Other factors that effect the value is the area in which the property is located, traffic patterns, school zones, community parks and recreation , street conditions and othe area attributes to determine value.

Valuation
An appraiser will combine all the information collected and stipulate an estimated market value for the property.This ammount is probably the best indication of what a property is worth, but may not be the final sales price.

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