Appraiser
Estimating a home's fair price
An appraiser is a certified or licensed expert who states his or her opinion of the quality of the property and its fair market value—a price range a given property will bring, assuming neither buyer nor seller is under any extreme pressure to buy or sell. Lenders usually choose appraisers from a list of individuals connected with organizations like Appraisal Institute or National Association of Independent Fee Appraisers.
The appraiser evaluates a home using three methods:
- Comparative market analysis, which the appraiser uses to find a typical selling price of a comparable home, not (necessarily) the highest priced home in the area
- Interviews with real estate agents and the appropriate government real estate tax personnel
- Touring the property, taking into account the square footage, floor plan, number of rooms and baths, upgrades, overall condition of the home and the neighborhood
Keep in mind:
- Although you pay the loan application fee, which includes the appraisal cost, the appraiser works for the lender, which uses an appraisal as a final qualifier for finalizing the loan.
- If you question the results, you may want to engage your own appraiser for a second opinion.
- Appraisers often work on a tight deadline, right before closing. If the appraisal comes in lower than the selling price, it could throw a monkey wrench into your loan approval process.
|