subject: Buying A House - Analyzing A Property's Appraisal [print this page] When considering the purchase of a property, pay extra attention to an appraisal provided by the seller. Even though most sellers accept this report as the most reliable determination of a home's worth, you have to be aware you will discover specific limitations to an appraisal. The date the appraisal was carried out, comps employed, and failure to compensate for unseen or critical defects can affect the accuracy of a report.
To shield yourself, confirm the math in the appraiser's calculations and written description about the house. Because most repairs are entered into a personal computer, you won't discover many mistakes with their calculations. But, errors do occasionally occur so be certain you confirm the numbers total correctly.
Besides having mathematical mistakes, the appraisal report is only as good as the data provided for the appraisal. When the real estate marketplace is hot, appraisers end up working long days. A busy business that mass generates their appraisals has a tendency to employ unskilled, low paid workers or trainees to perform their house inspections. When the appraisal report returns back to the office, a licensed appraiser may simply settle for what that trainee recorded, and then finishes completing the appraisal form and signs off on the report.
Regardless of the procedure employed, there will often be a opportunity for miscalculations to occur. It's not uncommon to discover problems in the square footage of a residence, the lot size, zoning, floor plan of the property, as well as the calculations. An appraisal will only be as accurate as the data supplied.
Although it's crucial to verify all facts and numbers in an appraisal, don't conclude all reports are prepared wrong. You can find reputable organizations that prepare a thorough and accurate report. By confirming the accuracy of a report, you are going to minimize the likelihood of problems.
In case you blindly accept a report at face value, you're setting yourself up for future troubles. It is critical for you to look out for your best interests when a seller or real estate agent supplies you with an appraisal. Make sure you substantiate their claims of the property's value.
Once in awhile you are going to come across a lender's appraisal being too low. This can take place when a lender doesn't want to make the loan or when the government clamps down on appraisal guidelines.
