Real estate appraisals are used by sellers, buyers, and their lenders. Sellers want to ensure that their sale price is not less than the property’s worth. Buyers, and particularly their lenders, want to ensure that the property is worth at least the purchase price. Indeed, most real estate sales contracts provide a provision allowing the buyer to back out of the sales agreement without penalty if the real estate appraisal is less than the purchase price. Moreover, lenders will limit any loan amounts to buy the property to a percentage of its appraised market value, not its purchase price.
A real estate appraisal is an independent estimate of the value of a parcel of real estate by an appraiser using approved, standardized methods. In many states, appraisers are required to be licensed. However, appraisals are opinions and will vary with the appraiser.
The appraisal report is a detailed listing of the appraisal that is usually done for the lender of the property, or by the owner, usually to establish a selling price. Most appraisal reports are based on preprinted forms, such as the Uniform Residential Appraisal Report (Uniform Residential Appraisal Report (Uniform 1004), Actual Report), that comply with the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines and are required by federal agencies that may be involved in the sale of the property, such as a federal bank lending money for the property.
To Read more about Appraisals – Click Here