The Appraisal Process
The purpose of the appraisal is essential to the lending process and helps protect both the bank and the buyer against lending (or paying) more for a home than its actual market value. Essentially, an appraisal is an estimate of the property’s value provided by a professional appraiser. Unlike the inspection, the appraisal will be performed in private and the buyer and buyer’s agent will not attend. However, it is not uncommon for the listing agent to attend the appraisal to provide their own comparative analysis for the appraiser. The appraiser may take the listing agents analysis into account but will often rely upon their own research to arrive at a final value.
In most cases, the appraiser will compare the home to similar properties in the area that have sold over the past 6 months. In a constantly changing market like today, it would not be accurate enough for a home that sold one year ago to be used as a comparable. If you remember at this time last year, people were more cautious about buying because of the financial collapse on Wall street. It would not be fair to compare what a home sold for in a market under those circumstances to what the market looks like today.
After the appraisal report is complete, a copy will be sent to both the buyer and the lender. The appraisal is ultimately the private property of the buyer and will never be shared with the seller unless the buyer decides to disclose the information.
Click here to see an example of an appraisal that uses the Sales Comparison Approach to appraise a property.
If you have additional questions, regarding appraisals or need a recommendation for a qualified appraiser, please contact Team Annett at 513-527-3060 or firstname.lastname@example.org .
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