![]() What Are the Components of an Appraisal?Purchasing a home can be the biggest investment most people may ever encounter. Whether it's where you raise your family, a seasonal vacation property or a rental fixer upper, purchasing real property is a complex financial transaction that requires multiple parties to pull it all off. You're probably familiar with the parties having a role in the transaction. The real estate agent is the most familiar face in the transaction. Then, the bank provides the financial capital required to fund the deal. And the title company ensures that all aspects of the sale are completed and that the title is clear to transfer from the seller to the purchaser. So, who makes sure the property is worth the purchase price? This is where you meet the appraiser. We provide an unbiased opinion of what a buyer might expect to pay — or a seller receive — for a parcel of real estate, where both buyer and seller are informed parties. A licensed, certified, professional appraiser from Taylor Groce Appraisal Services will ensure, you as an interested party, are informed. Inspecting the subject propertyOur first responsibility at Taylor Groce Appraisal Services is to inspect the property to determine its true status. We must actually view features, such as the number of bedrooms and bathrooms, the location, living areas, etc, to ensure they truly exist and are in the condition a typical buyer would expect them to be. To make sure the stated size of the property has not been misrepresented and document the layout of the house, the inspection often includes creating a sketch of the floorplan. Most importantly, we look for any obvious amenities - or defects - that would affect the value of the property. Back at the office, we use two or three approaches to determining the value of the property: sales comparison and, in the case of a rental property, an income approach. ![]() Replacement CostThis is where the appraiser uses information on local building costs, labor rates and other factors to determine how much it would cost to replace the property being appraised. This figure often sets the maximum on what a property would sell for. It's also the least used predictor of value. ![]() Analyzing Comparable SalesAppraisers become very familiar with the subdivisions in which they appraise. They innately understand the value of particular features to the people of that area. Then, the appraiser researches recent sales in close proximity to the subject and finds properties which are 'comparable' to the real estate in question. Using knowledge of the value of certain items such as square footage, additional bathrooms, hardwood floors, fireplaces or view lots (just to name a few), we adjust the comparable properties so that they are more accurately in line with the features of subject.
A true estimate of what the subject might sell for can only be determined once all differences between the comps and the subject have been evaluated. When it comes to valuing features of homes in Fortson and Muscogee, Taylor Groce Appraisal Services can't be beat. This approach to value is commonly given the most consideration when an appraisal is for a home purchase. Valuation Using the Income ApproachA third method of valuing a property is sometimes applied when an area has a reasonable number of renter occupied properties. In this scenario, the amount of income the real estate generates is taken into consideration along with other rents in the area for comparable properties to give an indicator of the current value. ReconciliationCombining information from all approaches, the appraiser is then ready to stipulate an estimated market value for the subject property. It is important to note that while the appraised value is probably the most reliable indication of what a property is worth, it may not be the final sales price. Depending on the specific situations of the buyer or seller, their level of urgency or a buyer's desire for that exact property, the closing price of a home can always be driven up or down.But the appraised value is often used as a guideline for lenders who don't want to loan a buyer more money than the property is actually worth. The bottom line is, an appraiser from Taylor Groce Appraisal Services will help you get the most accurate property value, so you can make wise real estate decisions. |