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The basics on home appraisals
A property appraisal is a document that provides an estimate of a property's market value. The appraisal is supported by the collection and analysis of data. Lenders require appraisals on properties prior to loan approval to ensure that the mortgage loan amount is not more than the value of the property.
Your home appraisal will be conducted by a real estate appraiser. This person is an impartial, independent third party who will be tasked with providing an objective report on the estimate of value of a property. |
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A real estate appraiser values real property (land, houses, buildings, etc.), not personal property (cars, jewelry, furniture). The appraiser determines the physical characteristics of the property to be appraised and estimates value based upon three common approaches to value:
- Sales Comparison Market Approach
- Cost Approach
- Income Capitalization Approach
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What's the process of an appraisal?
The physical review of a typical property usually takes about twenty to forty-five minutes. Sometimes an appraisal can take longer if the house is difficult to measure or has some unique features that require additional investigation by the appraiser.
After the initial review of the property the appraiser spends time examining or analyzing the neighborhood or area. The purpose of this is to search for other properties that are similar to the property being appraised that have sold recently and examine neighborhood influences. When the fieldwork is finished, the appraiser completes the report at his office. |
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