Features like handicap bars in the bathroom would be an example of something of value to seniors, but less attractive to someone in their 20's. To put this into perspective, think about the features that would be helpful in a senior housing development. However, the more useful the property, the higher the value. Utility - one tends to not think about the utility of a property because of the subjectivity of utility.If fewer people are interested, the demand is lower and the value therefore is also lower. Demand - as with any commodity, the more popular something is, the more people who are interested in buying.Here's how they play a role in the value of a piece of property: The acronym means demand, utility, scarcity and transferability. The elements of the value of real estate are generally known as the acronym "DUST". To properly value a piece of property, all appropriate elements must be taken into consideration. While most items we purchase have a limited life and are used nearly immediately, our home values are realized over time. In effect, the purpose of an appraisal is to determine the value of a property at a fixed point in time. However, before a buyer can obtain financing, a professional appraiser will be required. In nearly all cases, you will depend largely on comparative sales in the area to reach a consensus on the home's value. This could ultimately result in two appraisals being ordered on a single property.Īs a real estate professional, you will be involved in the sale of property and possibly helping sellers reach a decision on listing price. It is important to keep something in mind: if a buyer or seller hires an appraiser before there is a purchase and sale agreement in place, the lender working with the buyer may not accept that appraisal for the purposes of approving a loan. In most cases where a real estate agent is involved in the purchase or sale of a property, the lender will hire an appraiser of their choice. This is typically called a market valuation and not an appraisal.Īppraisers may be hired by a buyer, a seller, a lender, or any number of other persons who may need to have a property valued. While a real estate professional may rely on data obtained from recent sales to reach an estimated value, this is not considered an appraisal, instead it will result in an estimate of what the seller may reasonably expect to receive when a property is sold. There may be other reasons for obtaining a valid appraisal, but the three are the most common reasons. This can occur during the estate planning process, when determining taxes for an inheritance or a gift or for other reasons where it may be necessary to provide an estimated assessment value. Tax purposes - In some cases, a current market value is needed for tax purposes.Financial reasons - When a buyer is borrowing money, a property owner is considering refinancing or a property is being used as collateral, the lender will typically require the property be appraised.There may also be instances where a property transfers ownership for other reasons that may require a market value. Transfer of property - When a buyer and seller are involved in a real estate transaction, there needs to be a value placed on the property.Normally an appraisal may be used in three cases: transfer of property, financial reasons and tax purposes. One would not use an appraisal of a property from a year ago as the value today values fluctuate over time depending on numerous factors. Keep in mind, an appraisal is an estimate of the value of a property at a specific time. States often require additional licensing before this person can determine the value of residential or commercial properties.Īs previously stated, the purpose of an appraisal is to arrive at a market value of a given property. On a federal level, an appraiser must be a Certified Residential Real Property Appraiser or Certified General Real Property Appraiser. Generally, an appraiser is a person who has at least a Bachelor's degree and had completed specific educational requirements. This analysis is completed by an appraiser. To complete an appraisal, analysis of data and facts about the property must be completed. In general, an appraisal is an opinion formed by a professional about the value of a property. Many real estate professionals are uncertain as to what an appraisal is and who performs an appraisal. Appraisals are necessary for every real estate purchase and sale agreement.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |