Understanding the Appraisal Process
Purchasing a house is the largest transaction most people will encounter in their lifetime. Whether it’s a primary residence, a second vacation property or one of many rentals, the purchase of real property is an involved transaction that requires multiple people working in concert to make it all happen.
- The real estate agent is the most known face in the exchange.
- Next, the mortgage lender provides the money to fund the deal.
- The title company makes sure that all aspects of the transaction are completed and that the title is clear to transfer to the buyer from the seller.
- The Appraiser provides an accurate assessment of the true value of a parcel of real estate.
Appraisers can be experts in several subdivisions. We thoroughly understand the value of certain features to the homeowners of that area. An appraiser looks up recent transactions in that specific neighborhood and finds properties which are ‘comparable’ to the home being appraised. By assigning a dollar value to certain items such as fireplaces, room layout, appliance upgrades, additional bathrooms or bedrooms, or quality of construction, we add or subtract from each comparable’s sales price so that they are more accurately in line with the features of subject.
At Appraisals Only, Residential Real Estate Appraisers, we are experts when it comes to knowing the value of particular items in San Jose and Santa Clara County neighborhoods. The sales comparison approach to value is typically awarded the most weight when an appraisal is for a real estate exchange.
Valuation Using the Income Approach
A third way of valuing approach to value is sometimes employed when a neighborhood has a reasonable number of rental properties. In this situation, the amount of revenue the real estate yields is taken into consideration along with income produced by comparable properties to derive the current value.
Putting It All Together
Combining information from all approaches, the appraiser is then ready to put down an estimated market value for the property at hand. The estimate of value on the appraisal report is not always what’s being paid for the property even though it is likely the best indication of a property’s market value Depending on the specific situations of the buyer or seller, their level of urgency or a buyer’s desire for that exact property, the closing price of a home can always be driven up or down. But the appraised value is typically used as a guideline for lenders who don’t want to loan a buyer more money than the property would likely sell for in an open marketplace. At the end of the day: An appraiser from Appraisals Only, Residential Real Estate Appraisers will help you get the most fair and balanced property value, so you can make wise real estate decisions.