How to Buy a House: Home Appraisal
Anytime you are looking to buy a house, you will need to know the value of the house, which is determined through an appraisal. If you need a mortgage, the mortgage lender will be responsible for the appraisal process and engages an appraiser to perform the home appraisal. There are different approaches to appraisals.
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Appraisal Methods
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Home appraisers generally use two approaches in performing their appraisals. One is the cost approach, which takes into account the cost to replace the improvements on the property, considering physical deterioration and other factors, as well as land value. In the sales comparison approach to home appraisals, the appraiser estimates the value of a property based on the sales value of nearby, comparable properties that have been sold recently.
Input For Appraisals
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Appraisers use general and specific data for home appraisals. They get the specific data such as location, condition, amenities and size by visiting the property and performing an appraisal. They get the general data from sources such as local Multiple Listing Services that provide input on comparable home sales. Tax records and other public records also help.
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Appraisal Report
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The appraiser conducts the appraisal and turns in an appraisal report that includes his estimate of the property's value. If the lender orders the appraisal, then they own the appraisal even though you pay for it in the closing costs. You are entitled to get a copy of the appraisal report though.
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