Ulster County NY Real Estate

How Does The Appraiser Determine the Value of the Home?

The appraiser determines the value of the home based on three different approaches—the Sales Comparison Approach, The Cost Approach, and the Income Approach. When an appraiser is appraising residential homes, he will generally give the Sales Comparison Approach and the Cost Approach the most weight. With the Sales Comparison Approach, the appraiser will research and find at least three similar homes to the subject property. The comparable homes or ‘comps’ should be the most similar to the subject home with regard to style, square footage, number of bedrooms and bathrooms, age and other characteristics. These ‘comps’ should be located in close proximity to the subject property and have sold in the last six months. The appraiser looks at the comps and makes adjustments, since no two houses are exactly alike, in order to arrive at a final value estimate. The Cost Approach analyzes what it would cost to rebuild a similar structure.

What is the Title Company or Attorney Looking For When Examining the Title?

The Attorney is looking for any encumbrances that would affect the seller’s ability to offer clear and marketable title. The buyer’s attorney wants to certify that there is nothing on the title that would call into question the buyer’s legal right of ownership to the property after ownership is transferred.

What Can I Do If the Appraised Value Comes in Lower Than the Purchase Price?

If the appraised value comes in below the purchase price, it gives you as the buyer a good opportunity to re-negotiate the purchase price. A low appraisal can affect your ability to obtain your mortgage where loan-to-value is a concern with certain mortgage programs, so it might be vital to re-negotiate for a lower purchase price in that case.

4 Important Things to Understand About Title Insurance

1. It protects your ownership right to your home both from fraudulent claims against your ownership and from mistakes made in earlier sales, such a mistake in the spelling of a person’s name or an inaccurate description of the property.

2. It’s a one-time cost usually based on the price of the property.

3. There are both lender title policies, which protect the lender, and owner title policies, which protect you. The lender will probably require a lender policy.

4. Discounts on premiums are sometimes available if the home has been bought within only a few years since not as much work is required to check the title. Ask the title company if this discount is available.

Source: National Association of REALTORS®