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An appraisal is an estimate or opinion of value. This estimate of value is generally arrived at by the use of one or more of the three approaches to value, which are all derived from the market.
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Why Should You Have an Appraisal? |
An appraisal of real estate is a valuation of the rights of ownership, the appraiser must define the rights he intends to appraise.
The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to the report, consideration must be given to the site and amenities as well as the physical condition of the property. An appraiser may spend only a short time inspecting the property, however, this is only the beginning. Considerable research for collecting general and specific data must be done before the appraiser can arrive at a final opinion of value.
Due to the many types of value, such as Fair Market Value, Insurance Value, Tax Value, and Use Value, the need to precisely define the purpose of the appraisal is readily indicated.
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How Do You Choose an Appraiser? |
Before hiring their services of an appraiser, it is advisable to thoroughly check the qualifications of the appraiser. The National Association of Independent Fee Appraisers conducts a professionally recognized testing certifying program. This affords reasonable assurance to the public of the professional expertise, integrity, and responsibility of the membership. |
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Once you have selected an appraiser, be prepared to answer the following questions or have as much information as possible.
1. Purpose of the appraisal.
2. The required completion date of the appraisal.
3. Provide a copy of deed, survey, purchase agreement, or other pertinent papers pertaining to the property.
4. Is there a mortgage? If so, with whom, when placed, for how much, type of mortgage (FHA, VA etc.), interest rate, and any other type of financing.
5. Copy of current real estate tax bill, statement of special assessments, balance owing and on what (sewer, water, etc.).
6. Is the property listed for sale and if so, for how much and with whom.
7. What personal property is included.
8. If this is an income producing property, you must have a breakdown of income and expenses for the last year or two and a copy of the leases.
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