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Residential Appraisal Components and Misconceptions

Jul 1, 2010 | Buyer Tips, Featured, Featured Post

Written By Heidi Rozeske

One of the requirements that mortgage lenders will request during the home buying process is a real estate appraisal. For many first time buyers, there may be some misconceptions as to exactly what this is.  A real estate appraisal is a detailed report that is created by a licensed appraiser in your state and establishes the market value of a residential property. This is a very important aspect and several different considerations go into an official appraisal, and it forms the basis of the bank’s determination of the loan value. While appraisals do consider market comparisons, the actual appraisal value comes from much more than a market analysis.

Here are the components of a residential appraisal:

  • Property details
  • Comparisons  to at least three similar properties
  • Evaluation of the market conditions in the area
  • Environmental conditions that could decrease the property’s value
  • Structural issues that could decrease the property’s value
  • Estimate of time on the market
  • Status of the home site – new development, established neighborhood, acreage

Common misconceptions

  1. Appraisals aren’t the same as home inspections
  2. Appraisals are owned by the lender and not the buyer
  3. Assessed values don’t necessarily match market value
  4. Realtors do not provide appraisals
  5. Consumers do have the right to question appraisal facts and contest them

Understanding the neighborhood and ‘comps’ are an important part of your buying experience, but you are also bound to the official appraisal given to the lender. Work with your realtor, lender AND appraiser to make sure you understand all the details in the appraisal report of your new home.

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Written By Heidi Rozeske

Heidi Rozeske, the founder of Glass Slipper Homes, brings over 15 years of real estate expertise to the table. Her dedication to client satisfaction and her keen eye for detail make her an invaluable asset in your home-buying journey. Outside of real estate, Heidi enjoys staying active with pilates, indulging in creative hobbies like knitting and gardening, and sharing her thoughts through writing. Her commitment to community and personalized service sets Glass Slipper Homes apart in the Madison area.

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