Blue Ridge Real Estate

A real estate appraisal, or valuation, is the assessment of the worth of a house depending on several factors. This appraisal is key to you as the seller for various reasons. The obvious importance of this appraisal is to give you an idea of the most that you can get for your property or the least that you should accept. To have a price based on facts and a fair market analysis justifies the asking price in both your mind and the minds of all other parties involved, from the buyer to the realtors involved, and gives you a sure footing when it comes to negotiations about price with a prospective buyer.

It is extremely important that this asking price is based on the fair market value for the simple reason that if it is not, even if you have a buyer willing to pay the price, they may be unable to secure a loan if the formal appraisal does not qualify the house for the amount of loan they are asking. Your real estate professional can help you establish a fair asking price with an informal appraisal, or you can appraise it yourself using the following methods.

Real Estate professionals, whether they be Realtors or appraisers, establish valuations in the same manner. Residential and commercial valuations are both determined with the techniques detailed below, but commercial appraisers often employ additional criteria as well, such as criteria related to the income history of the property, to ensure the likelihood that the business in question will have enough profit to cover the mortgage.

The three most important criteria in real estate is: location, location, location; likewise, the most important criteria for appraising properties in a comparative market analysis is comparables. The term comparables is used to mean like property (similar in regards to location, type, cost and so on) and recently sold for an obviously fair market value by an arms length transaction. A list of such comparables can be obtained using MLS records. The number of bedrooms, bathrooms, square feet and other factors are taken into account along with the sales price, giving a rough estimate of price per square foot. That figure is adjusted plus or minus according to amenities such as square footage, valued features, construction quality, cost, etc.

The term ?adjustment? is used in conjunction with the term ?comparables?. Comparables establish the base appraisal value of a subject property by comparing like property in a related area to like property. However, there are always dissimilarities and differences between these parcels of real estate. These positive and negative differences must be adjusted up or down so as to arrive at this comparable value for the subject property. Such adjustments are in either dollar values or perhaps percentage amounts.

Another important means of evaluating your property is by a look at the history of market value for the neighborhood. For instance, if the market value of the neighborhood has been steadily rising for the past few years, it means that the probability of the property value in question rising steadily is a good one. On the other hand, if the market has been failing for the last few years, then the property value will, in all probability, continue to decline unless there is some kind of a development planned which might contribute to a change in this market trend.

Informal appraisals are often provided without charge by real estate agents as part of their basic services, but to secure a mortgage or other commitment, and often to clinch a sale, you must obtain a formalized appraisal of your property by a certified or licensed professional. The cost of such appraisals depends on the appraiser and the house to be appraised.