Factors considered in the appraisal of housing: the most important

The appraisal is simply an estimate of value. A licensed appraiser will appraise the property and give their opinion on the condition of the property on which it is done. Although, it may be similar to inspection, but there is a big difference. The main objective of this activity is to give a justified opinion on the value of the property. They need this because it can help in various decision making. For example, the seller can use this as the basis for the price. The buyer can use this to know how much to offer. Lenders need this to know how much money to credit their borrowers. It also has uses for other purposes such as taxes and many others.

However, one must fully understand home appraisal. This can help you determine the factors that will be considered in determining the appraised value. These factors could increase or decrease it.

So if you want to know the most important ones, check below:

1. The type of house- could be identified as single story, two story, two story, factory built.
2. Characteristics of the home (including design): the materials used and the type of structure present and how they were built.
3. Improvements made to the property: New components of the home are identified and described.
4. Comparables: As in the CMA, several comparables will be listed and will also be described using the same factors.
5. Sale with implication of financing
6. Location – The type of neighborhood is identified. Zoning zones will be taken into account as well as their proximity to other establishments.
7. Age of Property-
8. Size
9. Depreciation

The property value can be identified using 2 approaches. It could be through the sales and cost approach. In the sales comparison approach, the appraiser extracts the value of the property simply by identifying comparables within the area. He or she would compare the features of a house, including the size of the lot.

Regarding the cost approach, the appraiser extracts the value of the property by analyzing the value of the land, depreciation, the total value of the property and the cost of replacing them in case of destruction.

After the appraiser has completed the appraisal, they would need to create a report that states the following:

– The method used to determine the value.
– A description of the property including its size, condition and other characteristics.
– Any problem related to its structure.
– A description of the location.
– The comparables used
– The intended use of the appraisal
– Certification
– Limiting conditions.

When looking for appraisal services, make sure you hire a good appraiser. He or she must be certified or licensed. Hiring someone with these credentials would mean that they can perform their job in accordance with the standards set by the United States Accredited Appraisers Organization (USPAP). But this is not all that defines competence in the appraisal field. Your appraiser must have sufficient experience. He or she should have appraised various properties within the area.