An appraisal is an unbiased professional opinion of a property’s value conducted by a licensed or certified appraiser. It involves an assessment of various factors including location, condition, comparable sales, and market trends.
Appraisals are typically required during real estate transactions to ensure that the property’s value is accurately determined. Lenders, buyers, sellers, and other parties rely on appraisals to make informed decisions regarding financing, pricing, and investment.
In most cases, lenders hire appraisers to assess properties as part of the mortgage application process. However, appraisers can also be hired by homeowners, real estate agents, attorneys, government agencies, and other parties for various purposes such as estate planning, tax assessment, and litigation.
Appraisers consider various factors including the property’s size, location, condition, amenities, recent sales of similar properties (comparables), and current market trends. They use established appraisal methods and techniques to arrive at an accurate valuation.
The appraiser inspects the property, takes measurements, and photographs, and notes relevant details. They research comparable properties and analyze market data. Finally, they compile their findings into a formal appraisal report.
The timeframe for completing an appraisal can vary depending on factors such as the property’s size, complexity, and location, as well as the appraiser’s workload. On average, it can take anywhere from a few days to a few weeks.
The cost of an appraisal varies based on factors such as the property’s type, size, and location, as well as the appraiser’s experience and the scope of work required. Typically, residential appraisals range from a few hundred to a thousand dollars.
If the appraised value is lower than the purchase price, it can affect the financing of the property. Buyers may need to renegotiate the purchase price, make a larger down payment, or walk away from the transaction.
In some cases, parties involved in a real estate transaction may challenge an appraisal if they believe it is inaccurate or unfair. However, challenges must be based on legitimate concerns such as errors in the appraisal report or inappropriate appraisal methods.
Appraisers must be licensed or certified by their state regulatory agency, which typically requires completing education and training requirements, passing exams, and gaining experience under supervision. They must also adhere to professional standards and ethics codes.
