Whether you decide to buy a property or sell yours, there’s always a process you should go through. Part of that process is appraising the property, which helps assess important factors affecting ownership and investment. A property appraisal is one of the most, if not the most, essential steps to take when buying or selling a property.
If you’ve decided to invest in a property, it’s necessary to plan it carefully. Selling means you’ll want to sell your property at a competitive market price so you can profit more. Buying means you’re looking to start anew or enter a business venture, and investing in a property that will generate profit even when you decide to sell it must be your objective.
Whatever real estate investment it is, you can’t get the results you desire without property appraisal. It all starts at that crucial point in the real estate investment process before you can go anywhere. So read about what it is and how it works in this article.
What Is A Property Appraisal?
An appraisal is an unbiased professional opinion of a property’s value that determines its estimated price in the current market. The opinion will come from a licensed appraiser from a property appraisal services provider to hold more integrity. It’s a method almost always used for purchase-and-sale transactions.
Knowing a property’s value will help you understand its net worth. In doing so, you’ll be able to buy or sell one at a reasonable price. In addition, an appraisal also allows you to find out the current state of the market a property belongs in.
An appraiser considers several factors when determining a property’s value. Those factors include size, location, current condition and structure, overall presentation, market condition, and recent local sales.
How Property Appraisal Works
A property appraisal takes place as soon as parties involved in a purchase-and-sale transaction agree on a price. It could even be as early as before you put your property up for sale. You can also request a re-appraisal if you think the prospective property’s pricing is a bit lower or higher than you perceive.
Finding & Booking An Appraiser
The first thing to do is to find and book an appraiser to conduct the appraisal. The best approach is to search for a reputable local appraiser because they know the local market better. That means they’ll be able to give you the best opinion you can get.
They can provide you with a good estimated value for a property since they know the condition of the local market. A local appraiser can also answer your questions better, should you have any once they’ve given you the appraised property value.
Property appraisals are nearly always free; however, the average cost for a single-family home appraisal is around $300 to $450. For commercial properties, an appraisal would cost $2000 to $4000.
The Appraiser Visits The Property To Conduct The Appraisal
Once you’ve booked an appraiser, they will visit the property on your scheduled appraisal date. When they arrive, they’ll inspect the property to check important details that influence its value, e.g., structural integrity, fixtures, ease of access, etc. They’ll also ask questions to learn more about it, such as recent renovations on certain parts of the property.
In return, you can also ask any questions you have about the appraisal. After they’re done with the inspection, they’ll start assessing what they saw to determine the property’s estimated value.
Receiving The Property Appraisal Figure & Supporting Documents
Once the appraiser finishes their assessment, they’ll make a report of the appraisal, including the appraised property value. They’ll come back to you with a price they believe is accurate for the area, market, and property. It’s important to note that they use different methods to come up with that value for residential and commercial properties.
However, they use three general appraisal methods to reach a fair estimated property value. They’re the sales comparison approach, cost approach, and income capitalization approach.
Challenging The Appraisal Value
If you feel like the appraisal value is lower than you expect, you have the right to challenge it. You can base the challenge on the report the appraiser submitted to you. You can ask the other party to delay or extend the sale or purchase of a property until another appraisal has been completed.
If you can’t get the figure you desire, the transaction for the property may be canceled.
Knowing a property’s estimated value will help sellers and buyers get a fair share of the pie. It’s the best way to achieve whatever objective you want for selling or buying a property as it provides a figure of how much you can gain from it. Have a property appraiser take a look at your property or the one you’re interested in to know.
William Ross may not be a lawyer by profession, but he’s one of the sharpest writers out there when it comes to property tax and valuation. Armed with considerable knowledge and gifted with impeccable writing skills, he can surely deliver engaging property-related content.