Real estate transactions involving a mortgage loan will find a residential appraisal a very critical component of the whole transaction. An appraisal is required when you are in need of refinancing your mortgage or if you are selling your home to someone who needs a mortgage they will need an appraisal done. Residential appraisal is the unbiased opinion on the value of a residential property by a third party. If you are refinancing your mortgage the mortgage lender will need an appraisal to be completed. If you are buying a new home you will need an appraisal transaction to ensure you are not overpaying for it. Residential appraisals are generally performed by a licensed or state certified appraiser to avoid fraud and bias.
The Process Of Residential Appraisal
The main factors that influence the residential appraisal value include market trends that are reflected in the comparable properties, house features and size. An exterior and interior inspection of the property is conducted by the appraiser to take note of any factors of that influence the value of a property. The appraisal jurisdiction requires a standard report completed by the appraiser. An appraisal report will include comparable sales report, a map and sketch photos. The appraisal cost is taken up by the homeowner.
Residential Sellers And Residential Buyers
A loan may not be provided if a residential appraisal shows the value to be less than they offer to purchase that was made. A property buyer can negotiate for a lower purchasing price if the appraisal value is lower than the offer they had made. Low appraisals will mean that are seller will reduce the price of the property being sold. If you are financing your mortgage and looking to access some equity in the home and appraisal value is very important. Residential appraisal is critical as it determines the value in which the properties sell for and should be taken seriously.
Getting The Right Residential Appraiser
Part of a residential property buying process includes ordering an official appraisal to place the appropriate value on the property. A loan lender will require a property appraisal report before agreeing to loan the money needed to purchase the property. The law has provided a basis on which to hire a residential appraiser this includes getting a licensed appraiser to avoid any fraudulent and inflated property appraisal results. The appraisal foundation has a set of ethical and professional guidelines expected to be adhered to by the licensed residential property appraisers. There are three different approaches used in residential appraisals including cost approach, sales comparison approach, and income capitalization approach.