Buying and Selling Real Estate is among the largest and most complex transactions most people will ever make, and many turns to a professional certified appraiser to provide them with the most accurate opinion of the true value of the property under consideration. The role of the appraiser is to provide an objective impartial an unbiased opinion about the value of the property, including what a buyer might expect to pay as well as what the seller might expect to receive for a parcel of real estate. Most appraisals are reported in writing, although in certain circumstances an Appraiser may provide an oral appraisal.
A written appraisal generally includes a description of the property and it’s locale, an analysis of the highest and best use of the property, an analysis of comparable sales, information regarding current real estate activity and or trans within the market area, flood and census data, complete floor plan sketches and physical measurements of the exterior of the dwelling by a roller tape or laser measuring tool to establish the total gross living area GLA of the house, neighborhood maps, tax maps, zoning maps.
The relevant legal, physical, and economic factors are analyzed to the extent that is necessary to result in a conclusion what is the current use of the subject property and it’s the highest and best use, Legally permissible use, Financially Feasibility, Maximum productivity and Physically possible.
The appraisal typically starts with an inspection of the property in order to verify its condition, total living area, number of bedrooms and baths, finished or unfinished basement, observing amenities that contribute to the subject property value, as well as determine if any adverse external factors are present such as closer immediate proximity to freeways, busy traffic arteries, high-voltage power lines and others that may have an adverse effect on the value of the property.
The inspection usually includes a measurement and subsequent sketch of the property, and during the inspection, the appraiser also notes any additional features or defects that may affect the property’s value in either a positive or negative manner. After inspection, the appraiser uses two or three different approaches in developing credible verifiable appraisal report to determining the value of property including a sales comparison approach, a cost approach and in the case of investment or rental properties an income approach
In the sales comparison approach the appraiser researches recent sales in locating properties which are considered the most comparable to the subject. The sale price of those comparables is than used as a basis in which adjustments are made to account for differences between the comparables and the subject property.
In a cost approach, the appraiser uses information on local building cost, labor rates, and other data to estimate the cost to reconstruct the property.
In the case of investment or income-producing the property, such as rental properties the appraiser also utilizes an income approach to value. This approach determines the value of the property by calculating the amount of income the property produces over a period of time.
After reconciling information from each of the different approaches to value the appraiser is then able to provide a professional estimate of value for the subject property. The appraiser’s final estimate of value is typically used as a guideline for Lenders who obviously do care not to lend more money than the property is actually worth.
Whenever possible you should only utilize the most experienced or qualified appraisers within your area, as they’ll provide you with the most accurate value for your property allowing you to make qualified real estate decisions. For Fast, Reliable, Competent Residential Appraisals in NJ contact us at 877-860-22420 New Jersey Real Estate Appraisal Group and speak to our chief appraiser Aleksandar (Alek) Petreski