Home Appraisals and Your Escrow

When we come out to look at and evaluate your home, we're not doing a formal appraisal. What we're providing, in anticipation of listing and marketing your home, is what's known as a CMA, or Competitive Market Analysis (also sometimes known as a BPO, or Broker Price Opinion). So what's the difference between a CMA and an appraisal? Basically, an appraisal is usually done by an independent third party who evaluates the property the local market, estimates the market value of your homes as of a specific date, and then writes a detailed appraisal report showing all of their data and calculations.

This written appraisal is typically a rather lengthy report that is designed to be compliant with what's known as USPAP (Uniform Standards of Professional Appraisal Practice). Many appraisers also carry designations from national organizations like The Appraisal Institute.

Whether you're selling or buying a Sac Valley home, your transaction will likely be influenced by the appraisal process, and many people wonder how it really works. While we provide pricing advice as well as marketing recommendations, appraisers provide an unbiased, written opinion of value under the Definition of Market Value (willing buyer and seller, reasonable exposure time, most probable price). They will be doing many of the same things we do such as looking at all the positive and negative aspects of the market, your neighborhood, your home's size, condition and layout, and all the relevant comparables (active, pending, and recently-sold properties).

The appraiser's opinion, however, is geared toward a single-point value estimate and will be summarized in a 6-page report known as a Uniform Residential Appraisal Report. In addition to the appraisal report and all its requisite exhibits like photos, maps, definitions, assumptions, etc., the appraiser has to make sure they comply with their client's (usually the lender's) individual requirements like the inclusion or exclusion of pending sales, older sales, etc.

Where do we come in? It's important to know that for most real estate transactions, the appraisal is a critical part of getting the escrow closed. If there is an issue with the appraisal - and they do happen - you will want someone representing you who knows and understands the appraisal process; it has never been more important and could make or break your deal. We know the process and have successfully dealt with numerous situations where the appraisal was an issue. We also know appraisers and how they work, as well as where appraisal reports are prone to errors.

The bottom line is this: Appraisers have a tough job and the appraisal process is important to our real-estate financing system, but the process is not without its challenges. As a former appraiser and former designated member of The Appraisal Institute, Phil Boren is extremely familiar with how appraisals impact your escrow. This is just one of the many reasons to have us represent your in the sale or purchase of your home. Feel free to meet our teamreview our credentials and contact us if you have any questions.

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