Wading through the appraisal process when buying a property is essential. It’s not just a tedious formality, but critical to the valuation of your investment. The property being appraised is referred to as the subject property.
Before you lay your money (or your client’s money) down, be sure the valuation of your purchase is equal to your investment. In simple language this means be SURE you don’t pay more for the property than what it’s actually worth. Don’t take anything at face value. Things aren’t always as they appear.
What is a Real Estate Appraiser?
Appraisers are licensed after completing state-required courses and internships. The internship gives them hands-on experience and familiarizes them with the market.
A real estate appraiser helps with buyers’ decision-making process. Your appraiser will help you identify things that might have escaped you in your investigation of the property.
Paying a realistic price for your investment is important to the success of your business. Every dollar you waste squeezes your budget and gives you less investment capital should the next deal come along before your cash is freed.
Lenders sometimes have appraisers on staff. Other times they contract with independent appraisers. In most cases, you pay for the appraisal when you apply for your loan. If you’re allowed to choose your own appraiser, they might be subject to review before they are accepted.
There are a few benefits of building a relationship with one or two qualified appraisers. Your goal as a real estate investor is to close quickly, right? Adding them to your hand-selected team of professionals will help you do that. After you’ve worked together a couple times each begins to know the nuances of the other and your transactions will run smoother.
Remember: the appraiser must be an unbiased. He or she must be an objective third party without financial interest or connection with either person in the transaction.