![]() ![]() Valuation Using the Income Approach A third method of valuing a house is sometimes used when a neighborhood has a measurable number of rental properties. The sales comparison approach to value is usually awarded the most importance when an appraisal is for a home exchange. At Metes & Bounds Valuation Services, we are an authority in knowing the worth of real estate features in Scottsdale and Maricopa County neighborhoods. In the case where the subject has something such as an extra half bath that a comparable doesn't have, the appraiser might add the value of that bath to the comparable property.Īfter all differences have been accounted for, the appraiser reconciles the adjusted sales prices of all the comps and then derives an opinion of what the subject could sell for.Say, for example, the comparable property has an extra half bath that the subject doesn't, the appraiser may subtract the value of that half bath from the sales price of the comparable home.By assigning a dollar value to certain items such as square footage, additional bathrooms, hardwood floors, fireplaces or view lots (just to name a few), we adjust the comparable properties so that they more accurately portray the features of subject. Then, the appraiser looks up recent transactions in close proximity to the subject and finds properties which are 'comparable' to the property in question. They innately understand the value of certain features to the homeowners of that area. Paired Sales Analysis Appraisers become very familiar with the neighborhoods in which they work. The cost approach is also the least used predictor of value. This value often sets the upper limit on what a property would sell for. Replacement Cost This is where we analyze information on local construction costs, labor rates and other factors to figure out how much it would cost to construct a property comparable to the one being appraised. Next, after the inspection, an appraiser uses two or three approaches to determining the value of the property: paired sales analysis and, in the case of a rental property, an income approach. Most importantly, we look for any obvious features - or defects - that would affect the value of the property. To ensure the stated size of the property is accurate and convey the layout of the property, the inspection often requires creating a sketch of the floor plan. We must actually see aspects of the property, such as the number of bedrooms and bathrooms, the location, living areas, etc., to ensure they truly are there and are in the condition a reasonable buyer would expect them to be. Inspecting the subject property Our first responsibility at Metes & Bounds Valuation Services is to inspect the property to determine its true status. A professional Arizona licensed appraiser from Metes & Bounds Valuation Services will ensure you as an interested party are informed. We provide an unbiased opinion of what a buyer could expect to pay - or a seller receive - for a property, where both buyer and seller are informed parties. So who's responsible for making sure the value of the real estate is consistent with the purchase price? This is where you meet the appraiser. The title company makes sure that all requirements of the sale are completed and that a clear title passes from the seller to the purchaser. Next, the lender provides the financial capital needed to finance the transaction. The most familiar face in the exchange is the real estate agent. The majority of the participants are very familiar. To learn more about appraising, click here to see a short video or call us today to talk about your specific property. It doesn't matter if it's a main residence, an additional vacation home or an investment, the purchase of real property is a detailed transaction that requires multiple parties to see it through. What goes into an appraisal? Acquiring a house is the largest transaction some people might ever make. ![]()
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