Do You Need A Real Estate Appraisal?

What Every Buyer Should Know...

Ordering an Appraisal">appraisal is an important step in the home buying process, because the appraiser's report offers a close estimate of a property's true Market Value, the likely sales price it would bring in an open and competitive real estate market. Your Lender will require an appraisal when you ask to use a home or other real estate as Security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending.

A comparative market analysis, or CMA, should not be confused with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMAS, but an appraiser's report is much more detailed and is the only valuation report a bank will consider when deciding whether or not to lend the money.

About Appraisers and Appraisals

• Appraisers are licensed by individual states after completing coursework and internship hours that familiarize them with their real estate markets.
• The lender might use an appraiser on its staff, or contract with an independent appraiser. If you are allowed to choose the appraiser, and it isn't someone the lender is familiar with, the results might be subject to review before they are accepted.
• The appraiser should be an objective third party, someone who has no financial or other connection to any person involved in the transaction.
• The property being appraised is called the subject property.
• You will probably pay for the appraisal when you apply for your loan.

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