![]() Comprehending AppraisalsBuying real estate is the biggest investment most may ever make. Whether it's a primary residence, an additional vacation property or an investment, purchasing real property is an involved financial transaction that requires multiple parties to make it all happen. The majority of the participants are quite familiar. The most known face in the exchange is the real estate agent. Next, the mortgage company provides the money necessary to bankroll the exchange. And the title company ensures that all details of the exchange are completed and that the title is clear to pass to the buyer from the seller. So, who makes sure the value of the property is in line with the purchase price? In comes the appraiser. We provide an unbiased opinion of what a buyer could expect to pay — or a seller receive — for a parcel of real estate, where both buyer and seller are informed parties. A licensed, certified, professional appraiser from Executive Appraisal Services will ensure, you as an interested party, are informed. The inspection is where an appraisal beginsTo determine the true status of the property, it's our duty to first conduct a thorough inspection. We must see features hands on, such as the number of bedrooms and bathrooms, the location, and so on, to ensure they really exist and are in the shape a typical person would expect them to be. The inspection often includes a sketch of the house, ensuring the square footage is accurate and conveying the layout of the property. Most importantly, the appraiser identifies any obvious features - or defects - that would affect the value of the property. Once the site has been inspected, we use two or three approaches to determining the value of the property: paired sales analysis and, in the case of a rental property, an income approach. ![]() Replacement CostThis is where we use information on local construction costs, the cost of labor and other factors to figure out how much it would cost to build a property nearly identical to the one being appraised. This estimate commonly sets the maximum on what a property would sell for. The cost approach is also the least used method. ![]() Paired Sales AnalysisAppraisers get to know the neighborhoods in which they work. They innately understand the value of certain features to the homeowners of that area. Then, the appraiser looks up recent sales in close proximity to the subject and finds properties which are 'comparable' to the home at hand. Using knowledge of the value of certain items such as remodeled rooms, types of flooring, energy efficient items, patios and porches, or additional storage space, we add or subtract from each comparable's sales price so that they are more accurately in line with the features of subject property.
A true estimate of what the subject might sell for can only be determined once all differences between the comps and the subject have been evaluated. When it comes to associating a value with features of homes in North Canton and Stark, Executive Appraisal Services can't be beat. This approach to value is typically given the most importance when an appraisal is for a real estate purchase. Valuation Using the Income ApproachA third way of valuing a property is sometimes applied when an area has a reasonable number of rental properties. In this case, the amount of income the property produces is taken into consideration along with income produced by comparable properties to derive the current value. The Bottom LineCombining information from all approaches, the appraiser is then ready to document an estimated market value for the property in question. Note: While the appraised value is probably the strongest indication of what a house is worth, it probably will not be the final sales price. It's not uncommon for prices to be driven up or down by extenuating circumstances like the motivation or urgency of a seller or 'bidding wars'. But the appraised value is often used as a guideline for lenders who don't want to loan a buyer more money than they could get back in the event they had to put the property on the market again. The bottom line is, an appraiser from Executive Appraisal Services will guarantee you discover the most fair and balanced property value, so you can make wise real estate decisions. |