Why Is It Possible To Get Two Different Appraisal Amounts?
A house appraisal is something people get when they're buying or selling a home. If you want, you can even get two appraisals completed at this time. If you choose to get two, you might be surprised to find that each one lists the house at a different amount. To understand how this happens, you'll need to know how appraisers come up with the values they place on properties.
The Definition of an Appraisal
An appraisal of a house tells you the value of the home right now. It does not consider home prices a year ago or a year from now. It strictly sticks to values right now. If home prices are on the rise at this time, it might not reflect the increase in values as appraisers use comps to estimate values. If home prices are currently dropping, it might not reflect that either, due to the comps that appraisers use when appraising homes.
Appraisals are vital when selling or buying a home and you should choose an experienced appraisal that knows your area well.
Appraisals Are Subjective (Feelings, Tastes, Opinions)
Appraisals are subjective, and this is one of the main reasons amounts vary. You could hire five different appraisers right now to complete this process, and you could get five different amounts. While the amounts should not vary drastically, they will vary. Any type of service that is subjective can result in different outcomes. While appraisers try to ignore their own preferences, feelings, and tastes, it's almost impossible not to incorporate these things into an appraisal at all.
Appraisers Choose the Comps They Use
The other reason the amounts vary is from the comps they use. A comp refers to a house that is similar in location, nature, and style. Appraisers compare the homes they are appraising to comps to help them come up with accurate values. When they do this, they are free to choose the comps they want to use, and each appraiser might use different ones.
If each uses different comps, they will be comparing your home to different homes. The result is different outcomes for the appraisals.
Getting two appraisals for a house you are buying or selling will cost you more, but it can be a helpful step to take. If you have questions or need to hire an appraiser, contact a real estate agent in your area. Learn more about finding a real estate appraiser today.