In part one of this two-part blog series, we went over some of the simple facts to be aware of when it comes to appraisals in the real estate market. Performed to assign a professionally-determined value to a property's value during the sale process, the appraisal is one of the single most important parts of any homebuying situation.
At Daybreak Living, we're happy to assist our clients as they move through the process of looking to buy a home in Daybreak, Utah from any of our beautiful villages and neighborhoods. This incudes important pieces of the process like the appraisal, which we'll help you understand fully when the time comes. Today's part two of our series will go over a few additional facts to be aware of regarding real estate appraisals.
How Appraisers Carry Out an Appraisal
When appraising a given home, appraisers are legally obligated to maintain impartiality and follow the guidelines from the Uniform Standards of Professional Appraisal Practice. Within these requirements, they'll evaluate the home based on factors like size, age and condition of various elements such as the roof, heating and cooling systems, and the surrounding land. They'll also look at features of the interior like square footage, additional living spaces and build quality.
Typically an appraisal is not just a single document; it's typically broken into three parts:
- Market Analysis: This portion looks more widely at the area in which the home sits, examining its current market conditions. This section typically includes market trends for the area, along with an assessment of how similar properties are currently being priced at this time.
- Condition Report: This portion looks more specifically at the condition of the property itself, including aspects like zoning restrictions and upgrades made to the home over time. Site visit information is recorded here, with any property features that might affect the home's value mentioned.
- Valuation: This portion of the appraiser's report provides an estimation of the price range in which a given home should fall under current market conditions. The estimated price will be based on similar properties found in the surrounding area, as well as on any issues or problems that are present with the home itself.
How Appraisal Impacts Your Buying Situation
How will an appraisal impact your buying situation? That depends on how close the appraisal number is to the agreed-upon contract price for the home, plus whether this amount is higher or lower than the price you would like to pay.
It's important to be aware of your buying situation, as this will impact what course of action is recommended by the appraisal. If it comes up high, you'll have more options available, even if that price isn't exactly where you need it to be. On the other hand, if it comes up low, you might have a bit more work to do if you still want to go through with the purchase of the home.
For more on the appraisal process for any home, or to learn more about any of our Utah homes for sale, speak to the quality real estate staff at Daybreak Living today.
Utah Dave - Daybreak Neighboorhood Expert and Local Resident