When buying or selling a residential or commercial property, it is important to know how much it is worth. That is where a real estate appraiser comes in. An appraiser is a person qualified through education and training to estimate the value of real and personal property. Based on the appraised value an agent can determine the list price for the house. When dealing with real estate appraisal there are several terms to keep in mind.
Appraised value – An opinion of a property's fair market value. Most appraisals are based on comparable sales of houses nearby but can also take into account situations unique to the property.
Fair market value – The highest price a buyer would pay, and the lowest price a seller would accept.
Comparable sales – Recent sales of similar properties in nearby areas that is used to help determine market value.
Assessed value – A value placed on a property by a tax assessor for taxing purposes. Depending on the market, this may differ from the appraised value.
Appreciation – An increase in a property's value due to changes in the market, inflation or other causes. One should seek to buy in an area that is expected to appreciate in value.
Depreciation – The opposite of appreciation, this occurs when a property depreciates in value for the same reasons it would increase.
Mortgage – A legal document that pledges a property to a lender as security for payment of a debt. Many mortgages are based on the appraised value of the house. There are many different kinds of mortgages, from conventional to fixed-rate to balloon mortgages.
Loan – A sum of borrowed money that is repaid with interest. Most homes in the United States are bought using loans through mortgages.
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Real estate appraisers have often been trained to assess the value of various properties, including land zoned for commercial use and houses. By getting an accurate appraisal, property owners can determine how much their land and buildings are worth. This can have numerous financial impacts.
When someone wants to sell property, they often call a real estate appraiser who can determine a fair value for the land and buildings. This allows the property owner to sell homes and land without losing money on the deal.
On the opposite side, parties interested in purchasing property will often hire a real estate appraiser to help them buy the land and buildings at a fair price. This often provides a balance that allows both parties to benefit from real estate sales and auctions.
Even property owners who do not want to sell their assets might want to hire real estate appraisal experts to determine the true value of their land. In many cases, mortgage insurance agents require an appraisal to determine how much the insurance company will have to cover. Homeowners might also need an appraisal before a bank approves them for a loan.
Whether you manage commercial real estate or simply need to know a fair listing price for your residential property, you want to make sure that you hire a professional who can assess the value properly. You should, therefore, ask agents if they are certified to work in your state. You can also search online for forums where other property owners provide their own evaluations of the appraiser’s services.