Appraisals in Charlotte NC Real Estate
A very important part of every Metro Charlotte NC home buying or refinancing process is the appraisal. Since the banking scandals of recent years, a true and accurate appraisal is an integral part of the process and comes under intense scrutiny. What an appraisal is intended to portray is an honest opinion of a property’s true market value. That figure is the basis that determines the amount of money a lender will refinance or mortgage. With the appraisal in hand, the lender can decide whether that appraisal figure is high enough to support the amount of the mortgage or refinance amount. An appraisal also serves to protect the Charlotte NC home buyer from paying more than the home’s real value.
What important factors and considerations should go into every Charlotte NC home appraisal?
- A complete inspection of the home’s interior and exterior.
- A map showing the location of the property and the l the comps used by the appraiser.
- A sketch of the exterior with actual exterior dimensions noted.
- Clear photographs of the property and the comps used.
The actual appraisal report (URAR) should be broken down into sections, including the following topics:
- Subject of Appraisal including: address, legal description, owner name, borrower name and name of client.
- Contract: Info on the contract for sale. This is for appraisals that indicate that a change in ownership is about to take place.
- Neighborhood: It is important for the appraiser to investigate and note details about the neighborhood in which the property is located. In addition, he must include the description of the neighborhood as well as other pertinent characteristics, boundaries and present trends that may impact a property’s value.
- Site: Information on the zoning, size and shape of the property, noting any irregularities. Availability of and access to: utilities and flood zone information, if applicable should also be noted.
- Improvements: The physical condition of the property along with age, condition and materials used for improvements.
- Sales Comparisons: Appraised property is compared to other similar properties that have been recently appraised.
There are a three methods used to reach a reconciled value for the Charlotte NC property.
1.) Sale Comparison: The value of a home is determined by the value of recently sold properties that were very similar to the home being appraised. This value is referred to as the comparable or comp value. This method can help prevent a buyer from not paying more for a home than it is valued at.
2.) Cost Approach: What amount of dollars would be required to build a similar home using up to date costs of materials and labor, less an amount of depreciation based on physical wear and tear, replacement of various essential components, out of style design and outmoded materials as well as a home’s ability to fit in with its surroundings
3.) Income Approach: When a property is purchased for an investment that will bring derived productivity and income to the buyer, the appraiser must take into account current rents from similar properties, along with operating expense ratios when determining true value of the property. This method is often used in the case of investment properties or in situations when the property is an owner-occupied business.
If you have any Charlotte NC real estate questions or would like to find out what your Charlotte NC home is worth, give Wendy Richards a call at 704.604.6115, email at wendy@NCCharlotteHomes.com or visit our VIP Charlotte & Carolina Home Seller Valuation. It’s Your Move… How Can I Help?