How To Make Or Break A Real-Estate Appraisal

Planning to sell your home but clueless about its market value? Getting your home and property appraised would help you get an idea about your property’s value.

 However, the appraised value should not be confused with comparative market analysis (CMAs).

The appraised value is the only value honoured by banks whenever you are planning to loan money. 

If you are planning on getting your property appraised, then you would have to consider the banks’ preferred appraiser.

 Usually, the lender or the banks would have contracts with an exiting appraiser and you are required to get the services from them.

 If the banks or the lender would allow you to get a third-party appraiser, it may take a while before the financing is approved.

Appraisal reports are actually very detailed.

They would include details of the property, the status of real-estate market where the property is located, access to the property like roads, flawed characteristics of the property, how long the property would be up for sale, and the type of the neighbourhood where the property is located.

The appraiser would also include in their notes if the road going into the property is private.  The bank granting the loan may require a road maintenance agreement to be signed.

Appraisers should also not be confused with inspectors.

Inspectors intend to check the chimney, test appliances, inspect fixtures and recommend repairs to increase the home’s value before putting it up for sale.

 Appraisers would write down obvious problems in the property and their observation in the area.

When determining the value of the property, appraisers use three approaches.

 The value could be determined by the sales comparison approach or by comparing the property with other similar properties in the area.

 It could also be determined by identifying the much needed improvements in the property which is called the coast approach.

 In the income capitalization approach, the value is determined by the operating income that can be earned from the property.

But are appraiser fees expensive?  Appraiser fees depend on the time needed to finish appraising the property.

It could also be based on the amount appraiser and the person who needed the service agreed upon.

Sometimes, appraisers would state that fees are not final and subject to change based on additional expenses. 

Real-estate appraisal is needed when making bank loans, the property needs to be divided to multiply heirs, the property should be appraised for tax reasons, or for estate settlement.

An appraisal documents reduce conflict about the property market value during these situations.

 However, the values stated by the appraiser are not the absolute value. 

When getting an appraiser, verify his background and identify if they were able to meet requirements.

 States would require appraisers to be licensed, while there are others who would require appraisers to be state certified.

They also have strict standards and codes to follow.

Without any question and doubt, if you are looking or aiming for your property to be financed by a bank or get a reputable private or corporate buyer to look at your property, then you would have to have it appraised.

Real-estate is probably one of your biggest investments and you would like to protect and sell it in its proper value.

Investing In Real-Estate

You have probably heard it before, investing in real-estate is among the best investments you could make.  Usually, the value of real estate properties increases.

 It may sound easy, but beginners would usually fin out that it is not that easy.

 It would require knowledge which could be achieved through research, planning and hard work.  

There are common mistakes in real-estate investing which could lead to serious pitfalls.

Before you proceed in investing your hard-earned money in real-estate, you would have to consider several things first. 

For example, you would have to identify what kind of money you want to earn, it could be lump sum where you could have to venture into wholesaling and flipping.  

Flipping means you would have to buy properties and hold them until you could sell the properties for profits. 

Before you buy any kind of investment, you would have to be familiar with the laws covering the property.  Different states would usually have different laws covering property acquisition.


  There are legal procedures that you would have to undergo or complete to fully claim your right to the property.

Your investment could also provide passive income which would require you to look into houses or properties that could house a number of families.  These houses could be rented out.

 However, this kind of investment may have drawbacks since the property may end up with bad tenant or without any tenant at all. If directly managing the homes or rental units is not your cup of tea, then you could try getting a real estate investment group. 


They would be building or managing the property for you in exchange of a percentage of tenants’ monthly payments.

If it is your first time to venture in real-estate investing, then you would have to be aware of common beginner’s mistakes.  One common mistake is speculation.  Beginners would usually follow the media, buy a property and wait for its value to increase.


  This could be risky.  As mentioned earlier, real-estate investing requires research. Aside from that, you would also have to be prepared for the worst.


If nobody buys the property, then you would have to think of other methods on how you could generate income from it.  You could lease it, rent it and think about other exit strategies.

Another common mistake is getting emotions involved in their first investment.

 Emotions may cause problems when making business decisions like prospect buyers being cut-off even though they are offering the best deal.  Before you start looking for properties, make sure that the real estate team is ready. 

Most people think that they could start investing on their own, big mistake.  A good real-estate team and mentor would surely help you move quickly towards your goal. 

Who do you need in your team? You would need a real-estate agent, loan officer, tax adviser, and even a lawyer. 

When property hunting, keep two things in mind: location and value.  There are newly-developing places where real-estate could provide you with greater financial returns in the future.


 Usually, you would find a great property in a great location, it may need some fixes but it could be addressed inexpensively.

You may also want to think twice about buying a good property or residential house when it is located in areas with high foreclosures rates.

 Also, think about buying a property close to your home.  This way you could focus and check on the property without being hassled of traveling for hours.

Real-estate investing would not make you a rich man overnight. It would require you hard work and good marketing strategies.

 You would have to be mentally, emotionally and psychologically prepared for it.  But when strummed in the right strings, it could definitely provide you financial stability.