veryone involved in the minimum standards, published
sale of real estate has a periodically in the Uniform
vested interest in the Standard of Professional
results of a real estate Appraisal Practice by the
appraisal. The outcome affects Appraisal Foundation. The
the seller, the buyer, the Foundation is chartered by
lender, and even the realtor. Congress.
A too low valuation of the The recent real estate bubble,
property by the appraiser could unfortunately, brought problems
mean a seller must lower the for appraisers and many involved
asking price. For a lending in real estate transactions.
officer, it could mean a lesser According to Realty Times in
commission or none at all. A too their April 2006 issue,
high valuation means the buyer appraisers have been routinely
could be paying more than the asked by lenders to inflate real
property is worth. For the estate values to keep up with the
realtor, his/her commission could ever-rising real estate market.
go higher or lower, which is One real estate appraiser in San
based on the purchase/sell price Diego quit and turned in his
of the real estate. license to the state, after being
fired three consecutive times for
An appraiser, who should be refusing to inflate his
licensed by the state, performs valuations. Now, real estate
the real estate appraisal. It is appraisers across the United
best to hire someone local with States are under a microscope
years of full-time experience in from federal financial regulators
order to get a more accurate and Congress.
appraisal. The appraiser and
appraisal are governed by the The real estate appraiser may be
hired by the seller to determine
an accurate selling price or by If five different real estate
the buyer to ensure the accuracy appraisers evaluated the same
of the purchase price and property within the same
mortgage; but generally, the timeframe and under the same
lender does the hiring or uses conditions, it could result in
their own in-house appraiser. five different and varying real
Though buyers may assume the estate valuations. Why? There is
lender has their best interest, no set checklist or established
mortgage lenders have their own value for each property feature
best interest at the forefront, and amenity. Though appraisals
especially some not-so-scrupulous are based on prescribed
lending officers who may be standards, it is a subjective
targeting a higher commission. process.
If I were a seller, I would hire If there is more than one real
my own real estate appraiser to estate appraisal and they
ensure I was getting the most for disagree significantly, you have
my property. As a buyer, I would options. If the value is too low
put the money out upfront to hire for the seller, renovations may
an independent and objective raise the value — or you can
appraiser with no connection to decline to sell. If the lender
anyone within the real estate insists on its appraiser’s value,
transaction. This ensures that I which disagrees with your real
do not contract for a mortgage, estate appraiser’s value, as the
based on an inflated appraisal buyer you can look for financing
valuation, that will give me a elsewhere — or decline to
new home with a lower or negative purchase the real estate. There
equity. The lender still may also is the option to bring the
require a different appraiser. appraisers together to come to a
common agreement on the value. reputable, objective with no
connections to anyone in the
Remember, the person looking out transaction, local and
for your best interest is experienced.
yourself. Ensure the appraiser in
your real estate transaction is
About the Author:
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit San Diego Homes for Sale
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J Harris
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