Residential Appraisal Services
One’s home purchase can be the most important transaction most might ever consider. It doesn’t matter if it’s the main residence, a seasonal vacation property or an investment, the purchase of real property is a detailed financial transaction that requires multiple parties to make it all happen.
You’re probably familiar with the parties taking part in the transaction. The most known entity in the exchange is the real estate agent. Then, the lender provides the money necessary to finance the exchange. Ensuring all details of the transaction are completed and that the title is clear to pass from the seller to the buyer is the title company.
So who’s responsible for making sure the real estate is consistent with the purchase price? In comes the appraiser. We provide an unbiased estimate of what a buyer might expect to pay – or a seller receive – for a property, where both buyer and seller are informed parties. Residential Appraisal Services from Coast Appraisers and Consultants Inc, a professional New Jersey licensed appraiser, will ensure you as an interested party is informed.
Inspecting the subject property
Our first duty at Coast Appraisers and Consultants Inc are to inspect the property to ascertain its true status. We must see features first hand, such as the number of bedrooms and bathrooms, the location, living areas, etc., to ensure they indeed are present and are in the shape a reasonable buyer would expect them to be. The inspection often includes a sketch of the property, ensuring the square footage is correct and conveying the layout of the property. Most importantly, we look for any obvious amenities – or defects – that would affect the value of the house.
After the inspection, we use two or three approaches when determining the value of real property: a paired sales analysis, a replacement cost calculation, and an income approach when rental properties are prevalent.
This is where the appraiser analyzes information on local building costs, the cost of labor and other elements to figure out how much it would cost to construct a property nearly identical to the one being appraised. This estimate often sets the upper limit on what a property would sell for. It’s also the least used predictor of value.
Paired Sales Analysis
Appraisers become very familiar with the subdivisions in which they work. We innately understand the value of particular features to the people of that area. Then, the appraiser looks up recent sales in the vicinity and finds properties which are ‘comparable’ to the home at hand. By assigning a dollar value to certain items such as remodeled rooms, types of flooring, energy efficient items, patios, and porches, or extra storage space, we add or subtract from each comparable’s sales price so that they are more accurately in line with the features of subject property.
- If, for example, the comparable property has an irrigation system and the subject doesn’t, the appraiser may subtract the value of an irrigation system from the sales price of the comparable home.
- However, if the subject has an extra half-bathroom and the comparable does not, the appraiser might add an amount to the comparable property.
An opinion of what the subject might sell for can only be determined once all differences between the comps and the subject have been evaluated. This approach to value is commonly awarded the most consideration when an appraisal is for a home exchange.
Valuation Using the Income Approach
In the case of income producing properties – rental houses for example – the appraiser may use an additional method of valuing real estate. In this scenario, the amount of income the real estate generates is factored in with other rents in the area for comparable properties to give an indicator of the current value.