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-------------------------------------------------------------------------------- Bay to Bay Appraisal Services Why a Real Estate Appraisal? There are many reasons why you need a real
estate appraisal. Reduce property taxes, probate, estate
planning, divorce settlements are some. The most common one is to obtain a
mortgage. Most lenders are required by federal and
state laws and current banking regulations to obtain an appraisal for most
loans secured by real estate. As of Jan. 1, 1993, all appraisals made for
mortgage loans from federally insured lenders and other federally related
transactions must be made by a licensed or certified appraiser. What is a Appraisal? An appraisal is an objective supported
opinion of value of an adequately described piece of property made by an
appraiser who has sufficient knowledge, training and experience to accurately
estimate its value. In this detailed and time consuming report,
appraisers use comparable sales together with information about the property
being appraised, its neighborhood and community along with the local and
national economy, to support the appraised value. Look Objectively not Subjectively. The most important thing you can do when
previewing is to look at the house as if empty: four walls, floors and a
roof. Don't let the current owners' furniture and
decor influence you. Important Tip! If you are buying a house with the owner
carrying the paper (loan), it is well worth the cost to hire an appraiser to
make sure you don't pay more than it is worth. For your protection many real estate agents
will write in a purchase contract: this contract is contingent upon the
property appraising for the sales price. How is Value Established? The value of a house is based upon recent
sales of the similar neighboring homes in the market as well as rentals and
listing data. Ideally, appraisers want to use sales of
properties of the same size, age, room count, condition and with similar
amenities and external influences. This rarely happens though, so adjustments
have to be made, based on what people will pay extra for. Examples: extra square footage, bedrooms,
fireplace, upgrading, parking facilities, swimming pool, lot size, location
and so on. To help get a better picture, this information is entered on a
form, a value for differences is established and comparisons are made to the
subject property. A minimum of three verified closed sales
with photos are required to establish a value. Houses Appraise for More When: - Well maintained inside and out. - Located in a good school district. - Additions are done with the proper
building permits. - Additions conform with and fit well into
the existing house. - Properties throughout the neighborhood
are well maintained. - Not over improved or the largest house on
the block. - Style of the house conforms with those in
the neighborhood. - Zoning changes are not expected or there
is not a mixed use. Remember: Location, location, location. You can change everything about a house
except it's location. What is Poor Location? - Located on a feeder street. - Under an airport flight path. - In or near a gang territory. - Center of night life activities. - In a rundown block or neighborhood. - Next to a school or school yard
playground. - Next to apartments or commercial
property. - In close proximity to a freeway,
expressway or railroad. - Next to a gas station, near a municipal
garbage or toxic waste dump. - Odors from factories, farms and
processing plants are routinely noticed. - The city is affected by the closing of a
major employer. Think about Selling - When You are Buying. Location is a big factor in a home's
appraised value. This is most notably felt at the time you sell or refinance.
What seems like a bargain when you buy might turn into a real headache when
you try to sell. Drive around the neighborhood and note any
adverse conditions. You may think you can live with something
adverse for the price, but when it's time to sell you might find buyers
won't. Important Tip! Adding onto your house = Always obtain a
building permit. A 600 square foot addition built without a
permit is given no value on an appraisal. When it is time to sell or
refinance, the frustrations of the building permit process will be worth it. Always save copies of the final permit sign
offs and keep with your house papers. Buying a House with an Addition? Verify that it was built with a permit
prior to closing the sale. Don't just accept the sellers word. Get
copies of the permits before final sign off. Should you
want to refinance or sell at a later date, and the appraiser cannot verify
the addition being permitted, no value should be given. The result:
no new loan or worse . . . no sale. Tip! A one
bedroom house or condominium doesn't appreciate as well and is harder to
sell. Work with
An Agent An
advantage of working with a real estate agent is that they can provide you
with sales information of similar properties to better guide you on how much
to offer. Your agent
can provide recent sales "comps" for similar homes in the
neighborhood. Finding the
list prices is also important. Comparing the list prices with the sale prices
tells you exactly what percentage of the list price sellers are getting. To find out
what prices homes are selling for and to get a comprehensive report about the
neighborhood, try Zillow which covers most communities across the United
States. It's free and fairly accurate. A local
real estate agent typically will be more accurate what a home is likely to
sell for in a specfic neighborhood location. |
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Real Estate Guide |
