A real estate Appraisal is not the same thing as a Comparative Market Analysis (CMA). A real estate Appraisal determines the market value of the property, which is an estimate of the sale price of the house. An Appraisal is mandatory when you are borrowing money from a lender to purchase a home. An Appraisal is done by a specially trained and experienced individual known as an appraiser.
On the other hand, a Comparative Market Analysis is used to determine a reasonable asking price based on the selling and listing prices of comparable real estate. This is conducted by the real estate agent listing the property. The sole purpose of a CMA is to help the real estate agent advise the sellers when trying to come up with an appropriate asking price. This is different from an appraisal because a Comparative Market Analysis helps determine the actual asking price, where as the appraisal reveals the property’s actual value. Appraisers usually use similar research on comparable properties as a factor in determining the property value.
Here are some myths and facts to help you lean more about the Appraisal of your Mobile Eastern Shore real estate.
1. Myth: Some people may think that making sure the buyer does not overpay is the main goal of an appraisal.
Fact: People buying and selling real estate can gather resourceful information from an appraisal. However, the appraiser’s intended purpose is to provide protection for lenders. An Appraisal is required before the lender approves a buyer’s loan.
2. Myth: Appraisers determine the property value by multiplying the price per square foot by the square footage of the property.
Fact: Appraisers determine the value of the Mobile Eastern Shore real estate by other characteristics too. Things they take in to consideration include the location, proximity to desirable destinations, school districts, quality and condition of the property, selling prices of comparable real estate, and other relevant qualities.
3. Myth: Anyone involved in real estate could conduct Appraisals.
Fact: States regulate the requirements for Appraisals to obtain a license. Obtaining a license usually includes taking courses, passing an exam, and possible hours of experience.
4. Myth: There is never an obligation to educate buyers on problems with the home found by the appraiser.
Fact: The appraiser is required to notify buyers of problems when the buyer is applying for a mortgaged insured by the Federal Housing Administration. For other types of mortgages, the appraiser is not required to disclose potential defects.
5. Myth: If an Appraisal is done there is no need to obtain a home inspection on your Mobile Eastern Shore real estate.
Fact: As mentioned earlier the purpose of the Appraisal is to protect the lender. This does more for the people selling the Mobile Eastern Shore real estate. Where as, home inspections are meant to educate buyers on the state of the home and its major elements.