Los Angeles Real Estate Appraisal Facts And Fiction
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 sales price of the house. An appraisal is mandatory when borrowing money from a lender to purchase a home and is done by a specially trained indivi
dual 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 determine 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 estimates the property's actual value. Appraisers research comparable properties when determining the property value.
Here are some myths and facts to help you lean more about the appraisal of your Los Angeles real estate.
1. Myth: The main goal of an appraisal is ensuring that the buyer does not overpay for the property.
Fact: The appraiser's intended purpose is to provide protection for the lender. 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 Los Angeles real estate by other characteristics in addition to square footage, including number of bedrooms and baths, location, proximity to desirable destinations, school districts, quality and condition of the property, selling price of comparable properties and other relevant qualities.
3. Myth: Anyone involved in real estate can conduct an appraisal.
Fact: States regulate the licensing requirements of appaisers. Obtaining a license usually includes taking courses, passing an exam, and specific 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 mortgage 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 Los Angeles real estate.
Fact: The purpose of the appraisal is to protect the lender. Home inspections, however, are meant to inform buyers about the condition of the home being purchased.
Get a no obligation Comparative Market Analysis on your Los Angeles real estate.
