What You Should Know about Real Estate Appraisals

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What You Should Know about Real Estate Appraisals

Real estate appraisals are done when the value of a property needs to be determined. There are many situations when a residential real estate property appraisal is necessary. Appraisals are integral to many real estate transactions, and they can make or break a deal. If you are in the market for a home, plan to sell your current home, or are looking at other residential real estate transactions, you will likely need a real estate appraisal. Here's what to know about real estate appraisals. 

How They Work

The first thing you'll want to know about a residential real estate property appraisal is how it works. Real estate appraisals are performed by licensed home appraisers who use various methods to determine a home's value. Typically an appraiser will visit the property in person to measure its square footage and examine its features. The appraiser will also review nearby sold properties to determine the property's value. The real estate appraisal will be an unbiased estimate of the property's worth. 

How Much They Cost

How much a residential real estate property appraisal costs depends on the size of the property and its location. Real estate appraisals tend to be pricier in metropolitan areas. Large properties will also mean higher appraisal costs. The average price of a real estate appraisal is $300 to $400. However, prices can be more than $600 in urban areas. Before committing to a piece of property, you will likely want to get an appraisal. If you are buying a home using a mortgage, your lender will usually require you to cover the appraisal cost. 

They Are Not The Same As Home Inspections

It can be easy to confuse real estate appraisals with home inspections, but they are not the same thing. Most real estate transactions require both a residential real estate property appraisal and an inspection. A real estate appraisal is focused on determining the market value of a property. A home inspection takes a closer look at a property to identify any problems. While both inspections and appraisals are valuable, they are quite different. 

There are a few things to know about real estate appraisals. First, knowing what goes into an appraisal is vital. Second, most residential real estate property appraisals cost a few hundred dollars, but costs are typically higher in metropolitan areas. Finally, real estate appraisals are not the same as inspections, and you'll likely need both when buying a home.

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In Real Estate, It Pays to Have a Plan Real estate purchases are big purchases. You may pay several hundred thousand dollars, or even more, for a property. As such, there's not a lot of room for error. If you buy a house that needs a lot of unexpected work or end up in over your head when it comes to the mortgage, your dream home can quickly turn into a nightmare house. We want to help you avoid scenarios like that, which is why we share so much information about real estate on this blog. Our readers emerge more informed on a wide array of topics, from buying to closing.