It doesn’t matter whether it’s a house or a farm or a condo or a piece of undeveloped land that is being sold, nearly every real estate transaction needs the services of an appraiser who will give an unbiased professional opinion of the property’s value. Buyers do not want to overpay for a house, and an appraisal is especially important when a lender is involved. A good appraisal determines whether the purchase price is appropriate thus ensuring the lender’s collateral.
Qualified appraisers are required to be licensed or certified in all 50 states. They should be familiar with the local area, and must be impartial; they cannot have an interest in the transaction.
All appraisals are based on recent sales of like properties, as well as current market trends. The square footage of the house, number of bedrooms and bathrooms, the floor plan and the condition of the property all play a part in the final determination of the property’s value.
What happens if an appraisal is lower than expected? Of course, a second opinion by way of another appraisal is always an option. In some cases, an appeal to the original appraiser, giving new or missing information has been successful.
If everything goes smoothly, the appraisal is just another part of a real estate transaction. If the appraisal comes in lower than expected, an understanding of appraisers and their methods works in everyone’s favor so that buyers and sellers can cooperate to ensure the completion of their contract.