When you are considering purchasing a property; either for investment or
personal use you will need to hire a real estate appraiser. If you are financing
the purchase through your credit union or another financial institution will
most likely be required to hire a real estate appraiser to perform an appraisal
on the property. This is because your Credit Union wants to ensure that your
dream home doesn’t become a nightmare and that the purchase they are financing
is really worth the amount loaned.
In the best case scenarios the appraisal is returned indicating that the fair
market value of the home meets or exceeds the sales price. The problem comes in
when the appraisal indicates that the fair market value of the home is less than
the sales price. In the latter case, the prospective buyer would either need to
drop the deal or renegotiate the sales price with the seller.
As you can see, it is critically important that you find a reputable and
competent real estate appraiser. That one appraisal can easily make or break a
deal. Even if you are not financing the purchase through a lending institution
it is still worth the effort to insure that the property you are investing in is
really worth the amount of the purchase. If you should hire a less than
competent real estate appraiser you find out the hard way later on that the
property you purchased was not really worth the amount that you paid.
Real estate appraisers perform an evaluation of a property and then provide a
written evaluation after consulting standardized checklists and comparing the
property in question to county land value sources and sales information on
nearby similar properties. The estimation of replacement costs is also taken
into consideration. Finally, real estate appraisers must be able to verify legal
land descriptions. As you can see, there is quite a bit of work involved in
performing a competent real estate appraisal and it is important that each step
be performed accurately.
You real estate agent will most likely be able to suggest a real estate
appraiser but this does not necessarily mean this is the right person for the
job; it merely means this is the person they most often work with. To get the
job done right you need to find a real estate appraiser who is able to perform a
completely objective evaluation.
Look for someone who has been formally trained and who possess a license with
the state real estate commission to perform such appraisals. Also look for
someone who possesses adequate experience in performing real estate appraisals
and who is knowledgeable about the local real estate market. Some states require
real estate appraisers to have experience as a real estate agent and to hold a
current real estate license; even if your state is not one of these it may be a
good idea to look for someone with these qualities anyway because they probably
have their finger on the pulse of the local real estate market.
Like real estate agents, appraisers commonly specialize in certain types of
real estate. Some specialize in commercial properties while others work only in
residential properties. Some appraisers even specialize in only high end or
luxury properties. Many consumers find it beneficial to select a real estate
appraiser who specializes in the specific type of property they wish to have
appraised. Finally, don’t forget to ask for references and/or recommendations
from any real estate appraiser you consider.
