Post on 15-Jul-2015
transcript
Does the Buyer or Seller
Hire the Appraiser?
People in the market for downtown Phoenix and
Scottsdale condos often seek information on
getting a real estate appraisal on their potential
new home.
As with other property, the fair selling price on
condos is determined by a real estate appraisal.
What Is an Appraisal?
An appraisal is intended to be an unbiased
estimate of a fair price for a property.
First, the appraiser visually inspects the property,
noting such features as location, condition,
number of bedrooms and bathrooms, extras like a
garage or pool.
Measurements and photos are taken and the
physical report completed.
A less complete approach called a drive by
appraisal involves the appraiser driving by the
property and then researching real estate records;
it is not accepted by most lenders.
After a physical assessment is done, the appraiser
determines value by using sales comparisons, cost
approach or both.
The sales approach takes into consideration
recent sales of similar homes in the area using
standard formulas to account for such differences
as size variances, fireplaces,
mudrooms or garages.
The cost approach, on the other hand, uses local
building costs and labor rates to figure out how
much the house would cost to build. The most
common type of appraisal is the Uniform
Residential Appraisal Report (URAR), which
combines the sales and cost approaches.
What is a Real Estate Appraiser?
A real estate appraiser is a licensed contractor
usually hired by the lender.
Knowledgeable about real estate, an appraising
professional knows how to evaluate properties on
the basis of neighborhood, housing trends,
physical condition and a host of other variables
that go into determining the current value
of a home.
To get a fair appraisal, it’s best to hire a
professional who works with a number of lenders
so that there is no conflict of interest.
What Is the Purpose of an Appraisal?
Mortgage lenders generally require an appraisal
because they will only loan an amount of money in
line with the property’s appraised value.
With the high price of homes and condos in
today’s marketplace, it’s important to ensure the
loan is paying for a home worth its selling price.
If the appraisal comes in below the amount of the
sale, either the buyer must put more money down
or the contract must be renegotiated to account
for the lower value.
Who Pays for the Appraisal?
Because the lender is requiring the appraisal, it’s
usually the buyer who pays the bill.
In most sales, the lender orders the appraisal, the
buyer pays for it and then the lender takes a close
look at the appraisal itself before approving the
mortgage.
While drive by appraisals cost less than complete
property appraisals, they are often not accepted by
mortgage lenders.
If the home doesn’t appraise for the agreed upon
selling price, the buyer may ask for a second
appraisal from a different appraiser.
Appraisals are usually paid for at closing, and
you should be sure to keep a copy for your
own records.
Exceptions to the Rule
In a few cases, sellers may be expected to pay
for the appraisal.
For instance, in FHA-insured mortgages, the seller
or mortgage lender is expected to foot the bill for a
second appraisal.
Because the real estate business is built on endless
negotiations, a bank or other lender can allow a
seller to pay for the appraisal.
If you are looking for a condo to buy in Tempe,
Scottsdale or Phoenix, We Know Urban Realty will
help you find the perfect place.
Their realtors are experts when it comes to
urban living.
Will Daly, Broker
We Know Urban Realty, LLC
834 E Claremont Street, No 3
Phoenix, AZ 85014
(480) 510-8755
Email: Will@WeKnowUrban.com