A Professional Appraisal: Cost Vs Investment:
The cost of a typical professional residential real estate appraisal varies from area to area. Currently, the range is $300 to $650 for a full market value appraisal. A full market value appraisal with pre-market suggested listing price range could be an additional $50 to $100, depending again on the area that the subject property is located in.
The cost of an appraisal may be an expense and may be deductible from the proceeds in some tax areas and for some properties, and this will reduce the net cost of the appraisal. This is an area which each individual will need to consult their respective tax adviser on.
For instances where a property may have been under-priced or over-priced and the net selling price is higher than the net cost of the appraisal, one might say that an appraisal is a good investment. Where market forces or a person’s particular circumstances govern a lower price than fair market value, an appraisal may be a poor investment. Generally though, a professional opinion of value will be more beneficial to a property owner than an individual’s own limited experience can offer.
A Home Appraisal as a Selling & Marketing Aid
A full real estate appraisal done by a professional may be an essential aid in marketing a property. Before a property is listed, whether For-Sale-By-Owner or through a Realtor, is the best time to get a Market Value appraisal with a listing price analysis. A pre-marketing appraisal can assist in preventing over-pricing or under-pricing a property, thus enabling an owner to obtain their best price.
Once the subject property has been listed, the pre-marketing appraisal may be used to inform prospective purchasers and/or Realtors what the current market value of the subject property is, thus possibly reducing the potential for large scale negotiating. In other words, if an appraisal is made available to prospective purchasers and/or Realtors, the likelihood of receiving a sale at or near the list price is greatly enhanced. Prospective purchasers and/or Realtors will have more confidence in the value of the subject property.
Once a purchase contract has been agreed to, it may be possible to have the appraiser provide a letter of transmittal to the purchaser’s lender so that the purchaser may use the appraisal, thus saving the purchaser time and money in getting his/her mortgage approved.
A Professional Appraisal: Your Independent & Objective Opinion
Clients hire professional appraisers for their independent & objective opinions, not to rubber-stamp predetermined sales prices, lending values, assessment values, cost estimates by builders, reconstruction cost for damaged properties, or market values for third party uses such as the income tax department or financial projections. As mentioned in the previous section, a professional appraiser treasures his/her credibility and likewise his/her right to have an independent and objective opinion regarding the value of the particular property that he/she is appraising. This opinion may or may not confirm another party’s estimate of value, such as: a sales price, a lender’s indicated loan value, an assessment value, a cost estimate by a builder, or a price on a private or MLS listing. Where another person’s estimate of value accurately reflects current market value, the two should be in alignment.
A Professional Appraisal: The Credibility You Need To Value Your Property
Fee appraisers operate within a well-defined system that has been in place for generations. There are many checks and balances built into the system and an appraiser faces severe repercussions for any serious deviation from the accepted standards of practice. First of all there is the appraisal organization that the appraiser belongs to. Many, if not most, appraisal organizations, associations, institutes and governing bodies are self-regulating and carefully guard their reputation, thus each and every appraiser adheres to their regulations in order to maintain their accreditation, designation, licensing, and/or authority to represent their particular affiliation. The second level of checks and balances is the network of prime lenders who utilize residential real estate appraisals to confirm the lending values of the properties they are mortgaging or lending on. Often major lenders have an approval system that the individual appraiser or appraisal company must satisfy in order to be on the lender’s approved appraiser list. The third level of checks and balances is the appraiser himself/herself. The fee from doing one compromised appraisal hardly justifies damaging one’s career, reputation, lifetime of diligent work ethic, and/or financial security. In summary, the professional appraiser has nothing to gain by not being as credible as is humanly possible.
The Professional Appraisal
The intent of the following articles is to focus on the mechanics of establishing an accurate value and price on an individual residential property. We will look at the roles that a professional appraisal, a free market evaluation from a Realtor, and our own observations play in the process of getting the best price for the individual residential property. Briefly we will look at the following topics:
Historic Vs Future Value:
Reliability & Verifability:
Independent & Objective Opinion:
Expertise in Researching Market
Selling & Marketing Aid
Cost Vs Investment