Real Estate Appraisal

Real Estate Appraisals are a necessary tool for getting a mortgage, tax evaluation and estate planning. Appraisals are best defined as a detailed report of value, supported by market data and the objective opinion of a knowledgeable appraiser. In this report, appraisers use comparable sales together with information about the property being appraised, its neighborhood and community along with the local and national economy, to support the appraised value. Almost all federally insured lenders and mortgage lenders are required by law to have an appraisal of value made by a licensed or certified appraiser.

Real Estate values are based upon recent sales of the similar neighboring homes in the market as well as rentals and listing data “comps”.
Appraisers should use sales of properties of the same size, age, room count, condition and with similar amenities and external influences. This rarely happens, thus real estate appraisal adjustments have to be made, based on the variations. A minimum of three verified sales are required to establish an appraised value.

If you are buying real estate with the owner carrying the paper, it is well worth the cost to hire an appraiser to make sure you don't pay more than it is worth.
Your real estate agent will write in the purchase agreement something like: “this contract is contingent upon the subject property appraisal meeting the offered price.

One advantage of working with a real estate agent is that they can provide you with sales information of similar properties to better guide you on how much to offer. Your agent can provide recent sales "comps" for similar homes in the neighborhood.
Finding the listed real estate prices is also important. Comparing the listed prices with the actual sale prices tells you exactly what percentage of the list price sellers are getting.
To find out what properties are selling for and to get a comprehensive report about the neighborhood, look at inspection page for real estate appraisal.