22. January 2010 10:10
Q. We are having our house appraised next month. What do I need to know beforehand, especially if the appraisal is too low?
A. The purpose of a real estate appraisal is to establish a property’s value for financing purposes. This is different from a comparative market analysis (CMA), which real estate agents use to estimate a true market value. Professional appraisers are licensed and regulated by each state and follow federal guidelines.
The appraisal is a detailed report that is required by a lender to secure a loan. The appraiser’s job is to determine the valuation of a property by inspecting the property, taking measurements, examining the location of the property, comparing it to at least three similar properties, and evaluating the real estate market in the area. It’s important to note that an appraisal is not a home inspection.
If the appraisal comes in too low…keep your cool. If the house appraisal is lower than the sales price, the loan may not be approved. Many times there are several things you can do to fix or correct any problems and flaws that may have been found.
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