Property appraisals come into play whenever there is a need to ascertain the property value whether it is for taxation, creating a mortgage or even for a divorce settlement. The mortgage underwriting process heavily depends on real estate appraisal reports that specify the real value of the property. Lenders, mortgage brokers and mortgage insurers all depend on appraisal reports for their business. Real estate appraisals acquire a lot of importance for regulators who use the report for creating policies in risk mitigation and guiding real estate transactions. Governments use the real estate appraisal reports for assigning a value to public assets. For the most accurate valuation of properties, you have to hire the services of a qualified and licensed appraiser who is well conversant with the intricacies of the local market.
That appraisers have a tough test to qualify is an indication of how much importance the Government attaches to their role. Passing the appraiser test is not easy, and one has to take help from some online resources like www.appraisaltests.com that provides guidance and practice opportunities. On passing the test and undergoing stipulated period of an internship does one qualify for obtaining a license to start offering professional services. In this article, we will discuss how real estate appraisal reports help in making well-informed decisions in property transactions.
Reducing risks in lending
Property investors, as well as lenders, use real estate appraisal reports to mitigate the risk in investing or lending against property. From the characteristics of the neighborhood of the property to the condition of the property and its occupancy, everything is in focus to establish the credentials of the property. The appraisal is a kind of due diligence report that contains an opinion value and points to the real worth of the property.
Detecting fraud and preventing it
The main benefit of appraisal reports for real estate is to detect frauds and prevent it, too. The real estate industry faces a serious challenge from shadowy transactions that you can easily be weed out by using an appraisal report. The report helps to understand the market dynamics related to the transaction – from the sales price, list price, a number of days in the market to who the buyers and sellers are and properties that have exchanged quite quickly are all there in the report.
More than a review – it is an opinion to trust
Real estate appraisal reports are not just a review of the property but a well-researched opinion about it. The report is the product of comprehensive valuation methodologies used by appraisers and addresses issues deeply entrenched into the property that is never visible by any other method including automated valuation models. The report is an unbiased professional opinion that makes the decision making the process more objective. The disturbing elements of emotion, money and time are completely absent in the report that lends more authenticity to it.
Strong valuation fundamentals can help countries to remain strong and resilient in the face of any financial crisis like the great meltdown of 2008 that saw many countries dithering and reeling under its effects.