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A General Overview of Residential Appraisals What is a residential appraisal? Reports that detail the valuations of residential properties are termed as the residential appraisals. Appraisals are important in the home buying process. They help establish the real value regarding price of a residential property. To help establish the estimated value of a residential property similar properties in the market must be compared especially in terms of value. Borrowing money against residential property requires that one possess a legitimate residential appraisal. The lenders require seeing an appraisal as an assurance that in case of default they could recover their money. The residential appraisal must indicate the value of the property that is at least equivalent to the money being borrowed. It should be clear that there is a sharp contrast between a home inspection and residential appraisals. Inspection of the heating and cooling systems is what entails home inspection. Residential appraisal deals with valuing a home for the purposes of selling or buying or lending. Residential appraisals contain lots of details. A residential appraisal contains even the sales data of property.
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The information found in the residential appraisal regards the subject property. The house or building that is put for sale is what is referred to as the subject property. Side by side comparison of the property in question with the similar properties in the market is important when making residential appraisals.
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The area’s real estate market must be evaluated and details recorded in the appraisal. Any issue with the property must be included in the appraisal. Other details that the appraisal reports may contain include the problems with foundations if there any. The location of the property must be included in the appraisal as well as the estimated time the property is going to last on the market. Residential appraisal could be done in two main ways. Appraising residential properties could be done through the sales comparison approach. Making some adjustments to the similar properties when appraising residential properties are important. The Cost approach is another manner to appraise the residential property. Determination of the actual price for building a new residential home is done by using the cost approach method of appraisal. In case a new property get destroyed one should be able to know the estimated cost for putting up such a residential property. So reread this article to understand better what appraisal is all about.