Parrotfish Court
Pending
$2,528
8,926
Colonial
12
2,100
2
11
Conventional
Appraisals for Homes in Charles County Will Be Required
By Your Lender to Protect the Lender.
Appraisals are no mystery. They are performed by licensed experienced professionals and are based on similar homes in the same general area. The theory is that, if similar homes in the area have sold for a similar price, the lender will be able to sell the home for at least the amount owed in case of a default.
Sellers price their homes for sale, usually with advice from their listing agent/broker based on a thorough examination of recent sales of similar homes in the same area. This is a good predictor of value and appraisers have access to this data.
The appraiser's opinion is based on experience and a careful review of recent SOLD data. For example, if you have a contract for a home in Dorchester, the appraiser will examine the SOLD date for recent sales in Dorchester of homes of similar size and age.
EXAMPLE
4 Bedrooms, 2 Full Baths, 1 Half Bath, Priced at $419,900.
EXAMPLE:
Price of Home |
Subject Property |
Comparative #1 |
Comparative #2 |
| Address Date Settled SOLD Price Lot Size Style Age Sq. Ft. Fin. Garage Sp. Days on Market Type of Financing |
Minnow Court 4 months earlier $415,000 8,712 Colonial 14 2,205 2 14 Conventional |
Jurel Court 5 months earlier $416,000 9,583 Colonial 11 2,190 2 6 Conventional |
Based on the information about recent SOLD properties, the appraiser is likely to issue an appraisal for the contract price.
The homes are all similar in size and features and in a good market, an appraiser would recognize that there is some
time value in pricing homes.
Based on the information above, the appraiser will probably value the subject property the contract price since the homes are similar in size, lot size and finished square feet. The two car garage and time since the last properties sold would suggest that the seller, with advice from his/her listing agent have priced the home to sell within the range of recent SOLD properties.
If a home is priced significantly higher than similar homes in the area, it may be priced for the future. Or, in a very fast moving market, such as that often found in Maryland and Northern Virginia, the seller would expect that the buyers will be willing to pay cash over appraised value if the appraisal is lower than the contract price. On the other hand, if a home is priced significantly lower than area comparable homes, it is probably a very good buy and priced to sell quickly.
Appraisals are much more complicated than the example above, but, the purpose of the appraisal, to verify to the lender that the home has value that will protect the lender's investment is sound.
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