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.

Visit the site to see what's available right now:

www.weknowurban.com

Will Daly, Broker

We Know Urban Realty, LLC

834 E Claremont Street, No 3

Phoenix, AZ 85014

(480) 510-8755

Email: Will@WeKnowUrban.com