House appraisal, real estate valuation or property valuation is essentially the process of determining an accurate value for the property. Real estate transactions are frequently required by appraisals since they happen so regularly and each property is individually unique, unlike company stocks, which are almost identical and usually take a similar market price as time passes. Appraisals can be for one time or multiple times and are typically used in setting the selling price for a home. There are many different techniques that are used to determine the value of property, but common methods include: market surveys, building codes, tax assessments, surveys of structures, and even personal assessment by a household member or a friend. An appraisal will most likely be performed before any home is sold, which allows potential buyers to see first hand the condition of the house.
Not all real estate sales result in home appraisals. A home inspection of a house does not normally result in a house appraisal. The reason for this is that a home inspection is designed to alert potential buyers of problems and identify areas of concern that need to be addressed. Home inspections are typically performed by trained professionals who are accredited by the local home inspector association. When a home inspection indicates problems that require repair, the owner usually has the ability to negotiate with the inspector to make arrangements to repair or replace a problem identified during the inspection. This does not typically mean that a house appraisal will be performed.
The method a real estate price, agent uses to purchase the subject property, while not essential to obtaining a fair price, does affect the final appraisal value. Many states require real estate agents to obtain both a sales price and a fair market value estimate for each house they list. Multiple comparable sales are also a factor when determining an appropriate value for a subject property. A multiple comparable sales report is created from information gained from local newspapers, public records, and various websites.
Once the real estate agent determines the appropriate appraisal price, he or she informs the buyer of the offer. The offer amount is then presented to the seller. If the offer is accepted, the seller then goes back to the buyer and explains why the offer was higher than what was originally offered. If the offer is declined, the real estate agent will go back to the buyer and again offers the higher price. The home appraisal is not used to determine the final value of the house.
Comparable sales reports are offered at the time of the home appraisal sale. As soon as the appraiser has completed his or her review of the subject property, the agent will advise the buyer of the current market value of the property. If the home appraisal indicates that there are significant changes to the market value, the real estate transaction may be stopped. On the other hand, if the appraisal indicates that the condition of the subject property has remained unchanged since the last sale, the offer price is not changed.
In addition, as part of the appraisal process, the appraiser will collect any relevant information that he or she can gather during the course of the investigation. These might include sales price information, condition information, number of baths, etc. The appraiser collects all this information and then uses it to make an accurate determination of the fair market value of the subject property. To do this, the appraisers will review many similar properties in the area to determine how comparable properties have sold recently. At the end of the appraisal process, the appraisal offers a list of the actual selling prices for each subject property and the commission that the appraiser earned.
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