Michael Henry SRA - Need a Qualified Expert Witness Appraiser in Placer, Sacramento, El Dorado or Nevada County?
Real Property Appraisals:
The purchase of a home or residence can be the most serious financial decision some of us may ever make. It doesn't matter if it's where you plan to raise your family, a seasonal vacation home or an investment property, the purchase of real property is an involved financial transaction that requires multiple parties to see it through.
Most people are familiar with the parties having a role in the transaction. The real estate agent is the most familiar entity in the transaction. Then, the lender provides the financial capital needed to finance the exchange, and the title company ensures that all aspects of the sale are completed and that a clear title passes from the seller to the buyer.
So, who's responsible for making sure the value of the real estate is consistent with the purchase price? We provide an unbiased opinion of what a buyer could expect to pay — or a seller receive — for a property, where both buyer and seller are informed parties. A certified, professional appraiser from will ensure you, as an interested party, are informed.
The inspection is where an appraisal begins
Our first task at Premier Appraisal, Inc. is to inspect the property to ascertain its true status. We must actually see aspects of the property, such as the number of bedrooms and bathrooms, the location, living areas, etc, to ensure they indeed are present and are in the shape a reasonable buyer would expect them to be. The inspection often includes a sketch of the house, ensuring the square footage is accurate and illustrating the layout of the property. Most importantly, we look at the overall condition and quality of construction as well as any obvious amenities - or defects - that would affect the value of the house. This process is approximately 5% of the total appraisal process. From there we drive by and photograph comparable sales, pending sales and active listings of similar home we would consider to be reasonable replacements to your home.
Back at the office, is where the real work begins. We use two or three approaches to value to arrive at a final opinion for the value of the property.
Here, the appraiser uses information on local construction costs, labor rates and other elements to calculate how much it would cost to build a property similar to the one being appraised. This figure commonly sets the upper limit on what a property would sell for. The cost approach is also the least used predictor of value.
Appraisers can tell you a lot about the communities in which they appraise. They innately understand the value of certain features to the homeowners of that area. Then, the appraiser looks up recent sales in close proximity to the subject and finds properties which are 'comparable' to the real estate at hand. By assigning a dollar value to certain items such as upgraded appliances, extra bathrooms, additional living area, quality of construction, lot size, we adjust the comparable properties so that they more accurately match the features of subject property.
Once all necessary adjustments have been made, the appraiser reconciles the adjusted sales prices of all the comps and then derives an opinion of what the subject could sell for. When it comes to associating a value with features of homes in Granite Bay and Placer, Premier Appraisal, Inc. can't be beat. The sales comparison approach to value is commonly given the most importance when an appraisal is for a real estate purchase.
Valuation Using the Income Approach
A third way of valuing real estate is sometimes applied when an area has a reasonable number of renter occupied properties. In this situation, the amount of income the real estate generates is factored in with other rents in the area for comparable properties to determine the current value.
Arriving at a Value Conclusion
Combining information from all approaches, the appraiser is then ready to put down an estimated market value for the property in question. The estimate of value at the bottom of the appraisal report is not always the final sales price even though it is likely the best indication of a property's value. There are always mitigating factors such as the seller's desire to get out of the property, urgency or 'bidding wars' that may adjust an offer or listing price up or down. Regardless, the appraised value is typically employed as a guideline for lenders who don't want to loan a buyer more money than the property is actually worth. It all comes down to this, an appraiser works with risk analysis and must provide the most fair and balanced property value, so you can the user of the report make a wise real estate decisions.