Real estate transactions involving a mortgage loan will find a residential appraisal a very critical component of the whole transaction. If you are in need or refinancing you will need an appraisal then you will also need an appraisal done. Residential appraisal is the unbiased opinion on the value of a residential property by a third party. An appraisal should be completed as a requirement by the mortgage lender when you require refinancing for your mortgage. If you are buying a new home you will need an appraisal transaction to ensure you are not overpaying for it. Only licensed and certified appraisers can perform a residential property appraisal.
The Process Of Residential Appraisal
Factors such as current market trends reflected in the incomparable property such as house features and size influence the appraisal value. The appraiser will do an interior and exterior inspection on several factors or take note of any deferred maintenance. The appraisal jurisdiction requires a standard report completed by the appraiser. An appraisal report will include comparable sales report, a map and sketch photos. A homeowner is responsible for paying for the appraisal.
What Residential Buyers And Residential Sellers Need To Know
If a purchase offer that is less than the appraisal value is made the mortgage lender will not provide you with a loan. A property buyer can negotiate for a lower purchasing price if the appraisal value is lower than the offer they had made. As a seller a low appraisal means that you will have to lower the price of the property since lenders cannot approve loans then the property is worth higher than the properties worth. If you are financing your mortgage and looking to access some equity in the home and appraisal value is very important. The residential appraisal process should not be taken lightly as it determines the value of sale or purchase of a residential property.
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. When you are borrowing money from a lender in order to purchase a residential property the lender will require a residential property appraisal before the lender agrees to the amount of loan you have requested. 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. A licensed residential property appraiser should always adhere to the set rules and regulations and ethical and professional guidelines provided by the appraisal foundation. There are three different approaches used in residential appraisals including cost approach, sales comparison approach, and income capitalization approach.