Monday 26 November 2012

What's up with appraisals?

What’s up with Appraisals?

Let me begin with saying I am not an appraiser.  After many years in the real estate business as a Mortgage Broker and a House buyer, I have developed an understanding of the valuation of Real Estate.

Over the last 3 years, it has become increasingly difficult to anticipate the value of homes.  This has hindered refinances, debt consolidations and sometimes purchases. 

Values will change with the Real Estate market and with the economy.  As the banks tighten up their lending guidelines, more often than not, real estate values drop accordingly.  It is common to find that values drop in a “slow economy” like we are experiencing currently. 

How do appraisers establish a value for your house?  Glad you asked.

Age of the home
Condition of the home
Size (square footage)
Garage size (how many cars / size)
Land size (frontage / depth)
Recent sales of comparable homes in similar neighborhoods
Appraisers use their knowledge of neighborhoods and resale

Many times, people mistake the value of their home as what they could sell it for on the market.  The real estate sales market is not always indicative of the real value of the home.  For instance, just because the house down the street went multiple sale and went $25k over asking price does not make your $200k home worth $225k.   That is a result from a market condition.

It is important to seek out an experienced appraiser.  You can just ask me and I can get a great one for you!

Bottom line, “before you buy, sell or renew, speak with Andrew!”

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