San Francisco Real Estate Walkthrough: The Essential Guide Covering the Buying/Selling and Legal Hurdles

Citywide Realty Services Information provides helpful information on the processes involved in buying and selling property as well as possible steps a homeowner could take to improve the value of their home.

What does an appraisal mean?

A process that establishes the value of something significant, such as an antique or property is called an appraisal. An appraiser is typically a specialist in a particular field whose expertise are trusted by mortgage lenders, real estate agents or academics in the same field of study to make informed valuations surrounding the property or item being evaluated. An appraisal is often required to determine the worth of an item, property or other asset for purposes of taxation and insurance. An appraiser is usually a respected expert who has expertise in the field of appraisal. A building inspector would be an example of an impartial expert that could perform an appraisal and examine the property to determine if there are any factors or faults which might affect the value of the property. Insurance companies and lenders would consider the findings of an appraiser as factual information. An appraisal is a significant process in the property buying and selling process which can have a significant impact on the offer negotiation process. If the home appraisal values the property below the asking price of the property, mortgage lenders may choose not to finance the deal or they may ask the property buyer to pay the difference. To value an item, an appraiser can use any one of many valuation methods. An appraiser can compare similar property and objects of similar characteristics to estimate the value of the item. Appraisals can also be used to settle domestic disputes among heirs and are useful for setting the valuation of personal and property. This is explained in greater detail in the Divorce Attorney Content section.

Appraisals for Real Estate

An appraisal is necessary during the purchase or sale of a property as well if you refinance your mortgage. A mortgage refinance is when an existing mortgage or loan is updated with the current terms and interest rates. To determine the value of the property, a real estate appraisal will be conducted on the property as this ensures the exact value of the property is accurately represented in its sale price. Other factors like the amount of bathrooms or modifications to the property that increase or decrease the value are also taken into consideration. A swimming pool is one example of an extension to a property which would increase its value. Banks and mortgage lenders usually recommend their own appraisers to determine the value of a property. Banks can also use the appraisal to determine the value of the property in case there is a default on a mortgage. If the borrower is unable to make monthly mortgage payments, the bank can take possession of the home. It can also adversely affect the credit score of the borrower, making it difficult to obtain future loans and mortgages. When granting a mortgage, a bank will loan the full amount of the value of the property to the seller. In return, the bank will pay the amount owed and the owner of the property agrees to pay the interest monthly. To protect the bank against losing any money, the bank may use the value to determine the risk of default.

Collectibles or Antiques Items

Professional appraisals can be done on many items, including antiques and collectibles. A professional who is accredited in an area of expertise would give an impartial appraisal and be paid hourly or flat-fee. When determining the value of an antique, it is wise for an owner to have more than one appraiser. A local appraiser is more objective and fair in determining the value of an item than an owner of a pawn shop who may be motivated to offer it for a much lower price. Its common today to have the appraisals of antiques and valuables to be done online although most websites charge a flat fee for the appraisal of an item. Not all online appraisals you can trust but it may be cheaper and easier to establish an estimated value of an antique from a reputable online appraisal expert before consulting professionals. If you are interested in having an antique appraised, the American Society of Appraisers can be a great place to begin your search.

Insurance and appraisals

Some insurance policies may require the appraisal of domestic and commercial property before it is covered. Renters and homeowners are covered against the loss, damage, or theft of personal property. These policies cover a specified dollar amount and are considered to be blanket. The contents of the property are appraised to determine its worth and make a digital inventory. It helps to ensure that claims can be resolved quickly. A homeowner who has a homeowners policy that limits the amount of each item they can insure may wish to purchase luxury items insurance to cover the cost of collectibles and antiques. Insurance companies often require high-end items to be appraised before issuing personal property insurance policies. The appraisal records and validates the existence of an item and details its estimated value. A clause in an insurance contract that includes an appraisal clause states that the owner will receive an appraisal from an expert who is willing to work with him/her in dispute. An impartial appraisal is a fast way to settle disputes quickly and avoid costly and long-running lawsuits.

Cost and Home Assessment Process

When a buyer makes an offer to purchase a property, the appraiser will usually begin to evaluate it. The broker, mortgage lender or agent may ask for an appraisal. However, it is usually the buyers responsibility to pay the fee. A home appraisal can be as low as $300-$450 for a small proeprty, and up to $550 for larger properties. An appraiser will visit the property after the appraisal is ordered either by the homeowner, property buyer or mortgage lender. The appraiser will inspect the interior and exterior of the home in order to determine its condition and value. The appraiser may also need to take photographs or measure the house as evidence to justify their valuation. Appraisals can take from minutes to several hours, depending on the details of the property and the appraisal method used. To determine its value, the appraiser will likely compare the purchase prices of nearby property. These comparisons will be taken into account by the appraiser along with the information gained during their visit of the property. A copy of the appraisal is provided to the buyer and the lender and it can take as little as one week for the appraiser complete the report and send it out.

How to Increase the Value of Your Home with an Appraisal

While the role of an appraiser is meant to be is impartial and unbiased, they are still only human so there are small recommendations that can be made to the property which can help sellers improve the value of their home in the eyes of appraisers. By keeping the property tidy and clean, it conveys the feeling of a home well maintained. Depending on the size of your home, this can be accomplished fairly quickly and easily. Simple methods can be used to quickly boost the value of your property and these are explored in greater detail in our Real Estate content section.