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The Real Estate Appraiser
The purchase of a home is the largest single investment most people will ever make. For most individuals, this requires a complex financial transaction using the services of multiple real estate professionals.
The realtor is the most common face of these professionals. The financing necessary to fund the transaction is the responsibility of the mortgage broker or banker.
The title company is responsible for many of the legal details, including the assurance a clear title passes from the seller to the buyer.
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The Real Estate Appraiser
A real estate appraiser helps to establish the likely sales price a property would bring if offered in an open and competitive real estate market. This is commonly known as market value. Put another way, it is an unbiased estimate of value for a parcel of real estate, where both buyer and seller are informed parties. For this value, lenders turn to a licensed, certified, professional appraiser.
The Appraisal Process
A real estate appraisal starts with a physical inspection of the property being appraised. Number of bedrooms and bathrooms are important to ensure that they really exist and are in reasonable condition. Also, the inspection ensures the proper square footage and layout of the property by including an illustrative drawing. Obvious defects to the structure of the property affect the value negatively. This may included a leaky roof or hole in the wall.
Once the property has been inspected, the appraiser chooses from three approaches of property value. The cost approach, sales comparison approach, and income approach.
The Appraised Value
The appraised value is used as a guideline by lenders who will not loan a buyer more money than the property is worth. For this reason, it is very important to choose an experienced and qualified Real Estate Appraiser. It is very important to note that this appraised value may not be the final sales price. Bidding wars and seller motivation may adjust this price above or below this value.
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