Appraisals: How Are They Done & Who Needs Them

Posted by TSI Appraisal

The appraisal process can be a little confusing for buyers
and companies alike. There is a great deal of research, data gathering and
analysis that goes in to every appraisal report and it’s easy to get lost. To
help steer you into the right direction, here are a few basic things that
everyone should know about the appraisal process. Below are some frequently
asked questions about real estate appraisers.

What does an
appraiser do?

Appraisers provide objective, impartial and unbiased opinions
about the value of properties. They assemble a series of facts, statistics and
other information regarding specific properties and then analyze this data and
develop their opinion of value.

Appraisers are challenged to give their unbiased opinion of
value by looking at all of the variables. This can be difficult because every
property is unique and comes with its own specific set of variables.

In addition to these variables, the appraiser is bound by Uniform
Standard Professional Appraisal Practices (USPAP) guidelines, state regulations,
and lender regulations that dictate what they can and must put into the
appraisal report.

There are a lot of different types of appraisers. There are
jewelry appraisers, art appraisers … basically there are appraisers for nearly
every industry wherever an item or property’s value is can be debated.

Who needs an
An appraisal report is ordered by the lender, but is also
used by other parties in purchase process for informational purposes; this
includes the borrower, title insurance company and the county.

When you purchase a home, it is important to have the
property appraised, because it’s probably the largest purchase a person makes
in their lifetime. You don’t want to pay $250,000 for a house and come to find
out that is only worth $180,000 when you try to sell it, do you?

Also, an appraised value is important to the company lending
you the money to purchase the house. They want to ensure that they are giving
you the proper amount of financing for the property. Lastly, it is important to
the title insurance company as the premium the customer pays is directly
correlated with the appraised value of the property.

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