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All
appraisals must conform to the guidelines detailed in the Uniform Standards
Of Professional Appraisal Practice, better known as USPAP. Click here
for more History
of USPAP
The
majority of appraisals are an analysis, and opinion, of current market
value. However, true market value can be difficult to ascertain when prices
are volatile and properties are varied.
To
determine current market value, an appraiser will compare the price of your
home with that of at least three comparable homes that are in the area
and have sold within the past
90 days, he will look at sales as far back as 1 year if necessary, then
adjust for differences in the properties. The appraiser will physically
measure, or determine through public records and/or inspection, the gross
living area of the home being appraised. He may also take photographs
to include in the report with floor plans and a site map.
Potential
Problems
Inexperience and lack of training can result in appraisal problems. Appraisers
are certified by the individual states under federal guidelines, which require
appraisers to pass a written examination and have 75, or more, hours of
continuing education and 2,000, or more, hours of direct experience through
an apprenticeship.
All
appraisers must abide by professional and ethical standards set by USPAP.
You
should check the appraiser's license to verify it is currently in force.
What
to do if your house should appraise for less than the sale amount:
Most
inexperienced real estate sales people believe appraisal problems boil
down to two reasons:
| 1. |
The
appraiser has inadequate information about the property.
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| 2. |
The
appraiser is inexperienced or lacks adequate training.
However,
after many years as, " Review Appraisers" , our senior staff has found the
realities of the market place do not support either of these assumptions.
In
most cases, if the home does not appraise for the sale amount, it
was over priced.
There are also occasions when the market has taken a down turn and
sales people have not adjusted seller's expectations. Appraisal
reports usually reflect down turns before sales people have adjusted.
The
most expedient action, on the seller's part, is to identify the
addresses of similar sold homes, equally located which sold for as
much or more than his price in the past year. This can be accomplished by
a trip to the local Assessors office and a review of Property Transfer Affidavits.
Obtain copies of the Transfer Affidavits which represent properties in the
same neighborhood as the appraised property. After accomplishing this task,
ask the Assessor to provide copies of the field sheet record on each property.
The field sheet will contain detailed information on each property represented
by an affidavit. Compare the square foot area, lot size, exterior wall
type, date of construction, number of bedrooms, number of bathrooms,
basement and garage size to the appraised property. If these areas of
comparison are similar a written request for, "Reconsideration of Value"
may be submitted to the Lender. Keep in mind that if the sale dates on the
Property Transfer Affidavits are older than the dates of sale on the
properties used in the Appraiser's original report your request
for, "Reconsideration of Value" will, in most cases, be summarily denied. Only higher
priced similar homes with more recent dates of sale will be considered
superior to those submitted in the Appraisers original report.
After identifying
comparable, more recent, higher priced, sold property the seller
or his Agent may submit, to the Lender in writing, a "Request for Reconsideration
of Value". The Lender will forward the information to the Appraiser
requesting further review. After careful review and analysis, the Appraiser may increase
his or her final estimate of value.
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