When taking out a loan for buying a house, the lender you approached would be more than interested to know the real market value of the property you are interested in buying. They have to be sure of course that in the unfortunate event that you fail to pay back your loan, they can sell the property to get back what they have invested in your loan.
Thus, you have to be aware of the appraisal process. There are two things that you need to look at; appraisers and appraisals. Appraisers are individuals licensed by the state. Before they are licensed, they need to undergo coursework and internship to make sure that they become familiar with the real estate market.
Once you have reached out to the lender, they could choose to send an appraiser from their staff. If you are given the chance to seek out the service of an appraiser outside of their company, the result could be subjected to review first. This is very likely to happen if you brought in an appraiser that the lending company is not familiar with.
Keep in mind that the appraiser should be an objective third party. This means that that individual should have no financial or other connection with any party involved in the transaction. Any relation with either of the party could make the result of the appraisal questionable.
Also, when it comes to appraisals, you have to be ready for the costs. This is because you would be required to pay for the services of the appraiser. Thus, in setting your budget for the home buying process, make sure that you earmark a portion for appraisal.
After the property has been examined, you will receive a very detailed report which would contain the reasons why the subject property is priced as it is. Some of the more important things that it should contain include a side by side comparison with three similar properties. It should also contain an evaluation of real estate market in the area where the subject property is located.
The detailed report should also contain the things that brought down the price of the property. It could be a crumbling foundation or simple problems like old electrical and plumbing systems. It would also have an estimate average sale time for the house.
By learning about the appraisal process, you would be better prepared before you go into the home buying process.