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Created on Wednesday, 11 January 2012 11:28

Appraisers At Work

We may have all had to seek the services of an appraiser to determine the value of a real estate property we are looking to buy or sell out. In the mortgage industry, the work of an appraiser is very important and cannot be underestimated at all.

Mortgage lenders would require documents from an appraiser to show that the property has been properly assessed and the listing price on the property reflects the value of equity on the property.

No mortgage lender would be willing to issue out a home loan to a borrower if the home to be purchased does not have a substantial amount of equity on it.

Neither would mortgage lenders like to approve the request of a home loan if the seller of the property is asking for a price that is too high when compared to other properties of the same kind that are on the market.

Sellers also know the importance of an appraiser. Appraisers will prevent a situation where a seller might mistakenly accept a price lower than what the home is actually worth (this is only in cases where the home is not in a state of distress).

For these reasons; mortgage lenders, buyers and sellers always do ensure that before a deal for the sale of a home is completed, a report from an appraiser would have to be attached to the mortgage processing documents.

Appraisers’ decision on a property is based on a number of things, notably amongst these things are; the social amenities available at the area where the property is located and the state of the home. A well maintained property situated in an expensive neighborhood will receive high marks on the appraiser’s form and will therefore be priced on the higher side.

Whereas a dilapidated property situated in a neighborhood hit by the foreclosure crisis resulting in a large number of abandoned homes will be priced on the lower side.

For the appraiser to arrive at a decision, he or she must visit the home to conduct physical examination of the property. In many cases, homeowners complain about the length of time their appraisers spend in conducting the physical examination of the property with many people stating that the appraisers did not spend enough time on the property.

The fact is that the appraiser does not need to spend his or her entire time on the property in other to arrive at an estimate value for the home. This is because, site assessment forms a part of the appraisal process but it is not the only requirement that needs to be reached.

The appraiser must also take into account other market forces such as tax value on the home. The buyer needs to know the amount of tax that is required of him or her.  This information is just as important as assessing the true state of the property since tax rates also account for the cost of the property. The appraiser does not obtain this information from the site where the building is located.