What is a Real Estate Appraisal? – Performs, Functions, and More
What is a Real Estate Appraisal?
The real estate appraisal, technically known as “valuation report,” is a document signed by a competent professional. Its objective is to justifiably establish the commercial value of an asset at that precise moment.
There previously establish criteria and an adequate methodology for the proposed purpose of carrying out a real estate appraisal.
Appraisal or valuation is understood to be the procedure by which the appraiser studies the property, analyzes, and determines.
Its qualities and characteristics on a specific date establish an estimate of the fair and fair value of the property following the rules of the RNT.
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Who Performs a Real Estate Appraisal?
- The professionals who can perform real estate appraisals may vary depending on the type of property to be valued.
- Appraisers must have a qualification that corroborates that they have experience in building.
- Also, knowing the real estate market and learning all the applicable regulations at the appraisal time.
- Usually, those who do the appraisal of a home or commercial premises have the title of architect or technician.
- It comes to land. They are agronomists and, in the case of industrial goods, they are usually industrial engineers.
Functions of the Real Estate Appraisal
The functions of a real estate appraisal are:
- Review the cadastral registry data;
- Study the characteristics of the property;
- Draw a sketch and take pictures;
- Review the characteristics of the property and the building where it locates;
- The year of construction of the property;
- If it mortgage or if there are tenants;
- If the urban conditions are in order;
- Compare the property with other similar properties for sale on the market.
- Issue a report.
Variables of the Real Estate Appraisal
Many variables determine the market price in two different methods to calculate the house’s cost.
Valuation by Real Estate Appraisal
In this case, it is essential to visit the property to check all the factors that can vary. The factors to consider are:
- The location and environment of the property;
- The age of the property;
- Size of the property;
- State of conservation of the Property;
- Intended use of the stuff and its occupation;
- The distribution and qualities of the property;
- It legal situation of the property.
Valuation of the Property According to Similar Properties
- This method is the most used in valuations, where it is only necessary to estimate the value of a property.
- An estimated value of the property determines by comparing properties in the same area and with similar characteristics.
- In this case, we refer to the market study of properties with a similar typology with the property’s environment to be valued.
What are the Uses of Real Estate Appraisal?
- The real estate appraisal uses to determine the total value of a property at a precise moment.
- The appraisal carries out (considering the factors mentioned above).
- This value is essential for those who want to buy and those who want to sell a property.
The Price of a Real Estate Appraisal
- The price of a real estate appraisal considers a referential value. It can be quite close to the market reality.
- However, many times the owner of the property considers factors external to the appraisal.
- For example, the sentimental value of the property, Economic need in the short term, Etc.
Importance of Real Estate Appraisal
- As we said, the sale of a property, an appraisal is essential for the buyer, the seller, and the bank.
- However, the seller of the property you like may ask for S /. 250,000 soles.
- But when carrying out the appraisal, the resulting value is S /. 150,000 soles, S /. 100,000 soles below the price that the seller estimates to be correct.
- It does not prevent you from buying it, and you are fully entitled to buy a home above the appraised price.
- But if you need financing from the bank, they may not grant you more than 80% of the appraised value.
- It is also vital to carry out an appraisal because it is the most acceptable way to know if the house of your thoughts has a reasonable value.
- It gives you the ability to negotiate otherwise, and, in the last case, it is the best way for both of you to spread the best possible agreement.
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