Real Estate Appraisals:

A real estate appraisal is a service that, performed by a licensed and/or certified appraiser, will let you know how much a certain property is worth. This worth is often based on ‘highest and best use’ of the property which is essentially the highest possible worth of the land if vacant. When getting an appraisal, the highest and best use procedure is normally used. This is based on several factors. Legally allowable, physically possible, financially feasible, and result in the maximum value all contribute to the overall highest and best use value.

When getting an appraisal, you will be notified of the market value. This is the value of which a property would be worth on average, taking into consideration competition and other factors affecting value. There are three basic cost evaluation techniques to find this value. First, there is cost approach. This approach will determine how much improvements and land value costs add up to. There is also the sales comparison approach- which simply compares a piece of land to other similar pieces of land that have been sold. Lastly, there is income approach. This approach will evaluate commercial property- taking into effect any kind of profits the business incurred during its stay.

Finding an appraiser, paying an appraiser, and dealing with the appraisal process can be rather stressful. So why should you even get an appraisal? Things such as divorces or liquidation will actually require you get an appraisal, to accurately take further action. If you are just looking to sell your house, you won’t necessarily need the service of an appraiser. However, an appraiser can also help you deal with mortgages, and deal with property tax challenges. Add this to the added benefit of knowing how much to charge a potential buyer, and you find out that appraisals can be very handy to have. If you are a buyer and are going to finance your purchase, you will almost certainly be required to obtain an appraisal before your financing company will grant your loan. The appraisal fee is normally part of the closing costs and is normally paid by the buyer unless the seller is willing to pay it as an incentive to negotiate a sell.

Getting an appraisal is usually a rather simple process in the real estate business. Appraisers are usually licensed by the government, and do very objective work. Knowing how much your property is worth can help you in the long run but sometimes your real estate broker can help you give an estimate. If you are looking to save a few bucks and you are the seller, you can go without this service. If you are curious as to how much you should charge, and don’t know where to start, this is a must have service.