The Bigger Picture Of Residential Real Estate Appraisal Philadelphia PA

By Janet Patterson


The residential appraiser is taught how to measure a home, examine it for positive and negative features, take photos, study the neighborhood, seek out comparable sales and listings, and create a report that solves a valuation problem. All of these things primarily involve the technical side of the work. But what about the bigger picture of Residential Real Estate Appraisal Philadelphia PA? What appraisers do has a profound effect upon our local markets, communities, and the nation as a whole.

You can see it in everyday practice. Is it just a coincidence that a size adjustment of say $30 per square foot seems to be just right in equating two or three comparables? Is that only what the market seems willing to pay (or subtract) for the difference in size, or is there something else at play here?

These reports will note any unique characteristics of the property and of the surrounding area, such as a specific architectural style of a property or a major highway located adjacent to the parcel. They also consider additional factors of a property including the condition of the roof and any renovations successfully completed.

In Cost Approach, the appraisers check how much to build the residential real estate property. This approach plays a major role to new homes in which you can easily calculate the cost to build a new home. For many areas with booming real estate, the shortage of skilled labor drives the cost to build a new home high.

A residential real estate appraisal report should include the following: The valuation method used in the report, an explanation of the purpose of the report, a detailed description of the property, the appraiser's qualifications and signature, a statement that the appraiser has no financial interest in the subject property. Each part of the report plays a crucial part in assisting the user's comprehension of the final valuation of the property. Appraisal is an art, not a science. But there is one section of the appraisal report that draws significant attention. It is the section that describes the most likely approach utilized to determine an estimated value - the market comparison approach.

Being listed in MLS, if that home does end up closing at the inflated price, it will show up as a closed sale in MLS. When brokers and agents conduct a competitive market analysis of another similar home they want to list, the inflated price of the property you over appraised will enter into their research and influence the list price the agent recommends to their seller.

The inflated sale can cause a cascade effect. Now every home is overpriced because of one inflated sale. The result is buyers faced with less affordability and/or sellers attempting to sell their homes at asking prices that are not realistic. Buyers, sellers, agents and even lenders and title companies out there can suffer as a result of this. All because you did not do your duty and failed to consider the bigger picture.

In conclusion, the appraiser often acts as a traffic cop. Although the presence of a cop on the road will cause most sensible drivers to pay greater attention to the rules of the road, the cop must be will to act when necessary. The same basically holds true for valuations. Is the valuation reasonable? Does it reflect normal market variations? Like the traffic cop, the appraiser has a real influence over the lives and fortunes of others.




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