Home buyers and sellers alike inevitably come across the term appraisal sometime during the real estate process. Knowing what an appraisal is and how they are used is important in order to be prepared to make some of the many decisions required for a satisfactory outcome to any real estate transaction.
An appraisal is an opinion of value that helps to establish a property’s market value. The appraisal greatly influences the sales price because it is the most likely predictor of what the home or property would bring if offered in an open and competitive real estate market.
For a buyer who will be obtaining financing for the purchase of a home, the appraisal becomes an important part of the process for final loan commitment. A lender will not make a loan on a property unless it can ascertain that the property itself could be liquidated to satisfy the debt.
Appraisers are licensed by individual states and though likely recommended by your real estate agent, the lender may choose to review the report before it is accepted.
The appraisal report is very detailed and contains information about the subject property. Some of these things include:
· Details about the subject property, along with side-by-side comparisons of three similar properties.
· An evaluation of the overall real estate market in the area.
· Statements about issues the appraiser feels are harmful to the property’s value, such as poor access to the property or defects in the construction.
· Notations about seriously flawed characteristics, such as a crumbling foundation.
· An estimate of the average sales time for the property.
· What type of area the home is in (a development, stand alone acreage, etc.).
While personal approval is usually accomplished fairly soon in the loan process, final loan commitment usually depends on a satisfactory appraisal. The lender can thus expect that the loan would be covered in case of default.
An important thing to note about an appraisal is that it is not the same thing as a home inspection. Appraisers do not test appliances, look at the roof, check the chimney or do any other usual home inspection actions. Do not count on the appraisal to help you determine the condition of the home.
Here in Fredericksburg, there are several appraisers that have good reputations. Since Fredericksburg is a small town, you know that a good reputation is usually a good indicator of competency and fairness. If you are considering a move to a home in the Texas Hill Country, I would be happy to share my knowledge and experience in the Fredericksburg real estate market. Call me or send me an e-mail today and I will get back to you as soon as possible!
Sincerely,
Brett A. Bruster, MBA, e-PRO, SRES, ABR
Realtor Associate
CC Herber Co., Real Estate
145 E. Main St.
Fredericksburg, TX. 78624
Brett@brettbruster.com
(830)997-4323 Office
(830)997-8258 Home
(830)456-6243 Cell
For more information about Fredericksburg Texas and Texas Hill Country real estate, visit our Frequently Asked Questions or Links page.
