An appraisal is a formal financial estimate of the value of a property. When buying or refinancing a home, the lender will order an appraisal, which involves many different variables, including recent sales (called 'comps'), condition, location, features, upgrades, etc.
What's the difference between an appraisal, a home inspection and a Comparative Market Analysis (CMA)?
An appraisal is a professional, certified appraiser's calculation of the value of your home at a given point in time and involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser. In order to get the approximate value of your home, the appraisal takes into consideration such things as:
- Location, including the neighborhood your home is located in.
- Lot size, topography, view and landscaping.
- Your home's square footage.
- Your home's floor plan.
- Construction quality.
- Home design.
- Quality of life: availability of transportation, shopping and schools.
What is the role of the appraiser?
The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property—providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate. In California, appraisers are required to be licensed.
What is NOT the role of the appraiser?
The appraiser will not provide a buyer with an opinion as to whether or not they should purchase the property being appraised as they are typically not as familiar with the nuances of the property being offered for sale. For detailed questions regarding the sale of a property, please refer them to your Realtor.
CNBC has an excellent article titled 'Eight Ways You Can Improve Your Home Appraisal'. And don't miss the article by the Wall Street Journal at MSN Real Estate titled '10 tips to boost your home's appraisal'
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