It is the job of a real estate appraiser to appraise the value of your home. Every feature and aspect of your home plays a part in its value. However, the value is different than the price. A real estate appraiser will find out what the market value of your home is. The market value isn't a set price, but it typically gives you a good range of what price your home can sell for.
So how exactly does a real estate appraiser understand and compute the value of your home? There are many different methods for home valuation. Here are the three most common methods to appraise your home’s value.
- The sales comparison approach: This is when the appraiser will compare your property’s characteristics with those of comparable properties that have recently sold and set the value accordingly. So this is essentially a market set value.
- The cost approach: When the buyer will not pay more for your property than it would cost to build an equivalent is called the cost approach. The buyer sets the value for this approach. This means that if a buyer were to build a similar or comparable building from scratch, whatever that cost equates to, is all the buyer will pay for the property.
- The income approach: The fundamental math behind this approach is similar to the methods used for financial valuation, securities analysis or bond pricing. This is another market set value.
These are the three main methods of real estate appraisal, and depending on the type of real estate involved will determine which method is best for your home. If you are looking to sell your home and need a real estate appraiser then you should check out Midwest Appraisal Management. They are a leading real estate appraisal management company that specializes in providing custom real estate appraisal services all throughout the Midwest region of the United States. Real estate appraisal is a standard procedure and should be done accurately to get the fair market value of your home. To learn more about real estate appraisal click here.