Basically, appraisal reports concerning residential real estate are taken as documents with so much complexity, full of wide market data with documented procedures used to estimate value. Similarly the report can be a problem to seasonal real estate professionals in terms of comprehension. The complexity of the document is what makes many users concentrate on looking value statements only.
To help in transactions of real estate, the professionals use the reports on residential real estate appraisals as their tool. Similarly, the same tool is used in the residential real estate valuations irrespective of the property owner or the appraiser. Being in their area of practice, appraisers ought to have a wide knowledge of the environments that may affect a property’s final valuation.
Unique characteristics of the property and those of its surrounding like the specific style of architecture in a property are able to be detected in an appraisal report on the residential real estate.
Other properties like the property’s roofing conditions and any renovations are also considered in the report.
When an appraiser visits a property, they usually determine the appropriate value of that particular property by considering things like location of the property, previous appraisals as well as comparable home sales. Later on, findings of the research and observation are compiled into a report indicating the property’s value and the reason and method used in estimation.
The appraisal report on residential real estate should have the certain elements. First, the report should explain its purpose. Secondly, the report should state the valuation method used. The report should also describe in details the property’s characteristics. There should also be a statement in the report detaching the appraiser from any financial interest in the property. The report should also contain the signature and qualifications of the appraiser.
It’s of importance to note that every detail of the appraisal report is very important as it will help users understand the final valuation of the residential real estate. Remember also, that appraisal is not a science but an art. In the report, the area of most importance and significance is the section describing the approach used in determining the value of estimation of the property.
The approach mainly bases its work on comparable properties sale prices recently. Based on the similarity of properties, appraisers collect information of recent sale of the properties. Adjustments on the valuation are then done because similar properties are not identical. The considering the subject property, valuation adjustments, upwards or downwards are then done.
Good knowledge of the appraisal report is also very important to any homebuyer. Clear understanding of the report is also very important to partakers in the business as it is an important tool in the transaction.