Home Appraisal Values Are Critical
By Tom Laing
To
most, owning a home is a necessity, but sometimes it is a matter of
pride or a business investment. Home appraisal values become relevant
if one wishes to sell his house. Home appraisal values is a technical
term which means the value of a home in terms of money that it brings
in a real estate market. Home appraisal values are a critical factor
when it comes to assessing the selling price of the home while it’s
under consideration.
Home appraisal values or the process of
appraisal, if put in simpler terms, is usually performed by an
authorized person called the appraiser. Appraisement, assessment,
estimation, evaluation, and valuation are other synonyms invariably
used to mean appraisal. Generally it is the lender who pushes for home
appraisal values before financing the buyer. He does this so that in no
point of time he is risking any money. On the other hand, such an
appraisal helps assure that the buyer does not end up having negative
equity on the home. At the same time, keep in mind that there is no
guarantee that the lender-requested appraisal reflects the market price
of the property. Remember, all home loans require an independent
appraisal – that is, it is the current home appraisal values that will
determine the loan amount. Apart from the above mentioned condition,
the home appraisal values come in handy for the home owner when he
wishes to apply for refinancing, getting a home line of credit, and
before selling.
Home appraisal values are often influenced by a
set of valuation parameters that includes comparable sales, replacement
cost, number of bedrooms and bathrooms and other improvements. This is,
in technical terms, called the comparative analysis. It involves
recording and analyzing home value data from your property and
potential comparable properties, selecting the appropriate comparable
data, developing reasonable adjustments based on market data and
applying the findings to the subject (your property). Also the lot size
and the type of community in which the home is located will often
influence the market price and hence the home appraisal values. Another
method used to determine home appraisal values are the Reproduction
cost method. Here home appraisal values are reached by simulating the
construction in the present day and finding the cost. But the margin of
error is quite high in this case. Hence it is not a good enough method
for finding out home appraisal values.
Home appraisal values are
also influenced by real estate taxes, government services and the type
of housing sector in which the home sits. The type of construction - be
it brick, frame or other substance – has a telling effect on the home
appraisal values. Another factor that affects home appraisal values is
the land on which the property sits. In prominent locations, the value
of land makes the property a good buy – hence in this case could get
higher home appraisal values. But if the land on which the property
sits is a flood or earthquake zone or near an industrial dumping area,
then the home appraisal values are going to be lower.
Therefore
home appraisal values are crucial when it comes to getting a loan and
while selling the house. The home appraisal values give a fairer idea
for the owner about the current market value and hence the selling
potential of the property in the real estate market. Above all make
sure that home appraisal values are obtained from a true professional
appraiser!
Copyright 2005
Home Builders and Home Resources
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