A real estate appraisal gives the value of a piece of property based on what the value determinant is going to be needed for. The different value figures are used for buying/selling on the market, lender collateral information, tax determination, property insurance coverage values and for investment analysis among many things. Appraisals are now a very common and routine procedure with real estate as it can save a lot of money and reduce risk in buying a property. There are many methods used such as the sales comparison, income approach, and the cost method, which are all used at different times for different properties. In the following video, Quicken Loans discusses the comparable approach and the purpose of an appraisal.They discuss how both the mortgagor and the mortgagee alike want and need a neutral third party appraisal because of the need for a fair value assessment. The talks of fair assessments comes into play when talking about all of these online appraisal sites such as Zillow.com. It depends who is talking about it, but generally these sites are only a good starting point as they can be as far as 25% off of the fair value. While it may save you a couple hundred bucks to use this site upfront, it could cost you thousands upon the sale of a misvalued property. http://www.bankingmyway.com/real-estate/how-accurate-are-online-home-appraisals
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