How to Appraise a Foreclosure
A Foreclosed Home
Many times when we think of a professional property appraiser like Abbe Edelman, we think that they only perform property appraisals on properties that are brand new, or on those which are being put on the market for sale. When a home is going through the foreclosure process, an appraiser may be hired as well. Too many times the asking price on a home can be very different than the fair market value. Sellers sometimes have property overvalued so the foreclosure listing can be unreliable. It is generally considered best to hire a professional like Abbe Edelman to perform a property appraisal so that the house value can be stated more accurately before it is sold again.
Obtaining a Foreclosure Appraisal
The entire foreclosure process can be a very lengthy and complicated procedure. It is typically a lender who requests an appraisal on a foreclosure. A foreclosure occurs many times because a borrower gets behind in their mortgage payments by 90 or 120 days. The lender will need a good idea of how much the house will be worth on the current market and therefore will request a property appraisal before trying to resell the property. There can be a big difference between the fair market value given to a property and the quick disposition value. A property appraisal is beneficial for determining a home’s value when it is put back on the market. There is a big difference between and as-Is sale, a short sale, or an As-repaired sale. These differences are very important when re-valuing a house that is in foreclosure. Lending facilities are ending up owning more pieces of property due to foreclosures. These must be resold but in order to do this, the fair market value for the current market must be determined by a property appraiser.
Methods Used for Appraisals
There are three main approaches used in performing property appraisals, but two are the most commonly used. The most common method is a comparative market analysis. This step in the process is where a property appraiser will compare the property to other comparable homes in the same area. Lot size, unfinished areas, style and type of construction, age of the home, usable square footage of the home and any additional features or selling points can all be factors that are compared and used to determine a home’s value. A property appraiser may compare these features with other similar homes in the same neighborhood to estimate the home’s current fair market value. They may also use a cost approach which includes considering how much it would cost to rebuild the structure.
Foreclosure Appraisal Reports
As a general rule, when a property appraisal is performed, the appraiser will only consider the value of similar homes which were sold or purchased during the 6 months prior to the date of the appraisal. Past prices can have a bigger influence on foreclosure appraisals than the fact that the real estate market is improving. There can be some difficulties that arise with foreclosure appraisals. When a property appraisal is performed, the appraiser must estimate the value according to the fair market value of the home in the present market conditions. In a neighborhood that has experienced a large number of foreclosures or short sales the home being appraised can be valued much less than it was listed for on the market prior to the foreclosures. This can be a difficult situation for the seller who may have to take much less for the property than they expected. There can be quite a disparity between a home’s value if it is in a neighborhood that has no foreclosures when compared to a neighborhood that experiences many of them. Appraisals can reflect as much as a 30 percent difference in these situations.
Obtaining a Foreclosure Appraisal
The entire foreclosure process can be a very lengthy and complicated procedure. It is typically a lender who requests an appraisal on a foreclosure. A foreclosure occurs many times because a borrower gets behind in their mortgage payments by 90 or 120 days. The lender will need a good idea of how much the house will be worth on the current market and therefore will request a property appraisal before trying to resell the property. There can be a big difference between the fair market value given to a property and the quick disposition value. A property appraisal is beneficial for determining a home’s value when it is put back on the market. There is a big difference between and as-Is sale, a short sale, or an As-repaired sale. These differences are very important when re-valuing a house that is in foreclosure. Lending facilities are ending up owning more pieces of property due to foreclosures. These must be resold but in order to do this, the fair market value for the current market must be determined by a property appraiser.
Methods Used for Appraisals
There are three main approaches used in performing property appraisals, but two are the most commonly used. The most common method is a comparative market analysis. This step in the process is where a property appraiser will compare the property to other comparable homes in the same area. Lot size, unfinished areas, style and type of construction, age of the home, usable square footage of the home and any additional features or selling points can all be factors that are compared and used to determine a home’s value. A property appraiser may compare these features with other similar homes in the same neighborhood to estimate the home’s current fair market value. They may also use a cost approach which includes considering how much it would cost to rebuild the structure.
Foreclosure Appraisal Reports
As a general rule, when a property appraisal is performed, the appraiser will only consider the value of similar homes which were sold or purchased during the 6 months prior to the date of the appraisal. Past prices can have a bigger influence on foreclosure appraisals than the fact that the real estate market is improving. There can be some difficulties that arise with foreclosure appraisals. When a property appraisal is performed, the appraiser must estimate the value according to the fair market value of the home in the present market conditions. In a neighborhood that has experienced a large number of foreclosures or short sales the home being appraised can be valued much less than it was listed for on the market prior to the foreclosures. This can be a difficult situation for the seller who may have to take much less for the property than they expected. There can be quite a disparity between a home’s value if it is in a neighborhood that has no foreclosures when compared to a neighborhood that experiences many of them. Appraisals can reflect as much as a 30 percent difference in these situations.