with condition, but they will still look at the recent sales and determine if they are comfortable with the price you are paying. During the appraisal, the appraiser determines the market value based on its condition, location, square footage, number of rooms, bathrooms, lot size, and garage. The appraiser uses analytic data based on home features, comparable sales (“comps”) in the area, and other pricing factors to set a value, or market price, and makes his summary based on complex mathematical calculations. No appraisal is perfect because they are subjective and bias by the appraiser. If you are buying a home and the appraisal comes in lower than the agreed upon price with the seller don't immediately have a knee jerk reaction and think you are paying too much. Look yourself at the recent sold properties and discuss it with your agent. I once knew a home appraiser that got into the house flipping business. He lost money on several flips as he quickly found out its different appraising homes for the bank rather than what buyers and sellers are willing to pay. Appraisers are taught to look at as much at hard data as possible and make the world of grey blacker and whiter. Some properties are hard to appraise. If you are buying a newer home where tons of similar homes have recently sold that's easy, but what if you are buying an acreage or an older home in a community that has had little sales? That is a lot more difficult. I've been involved in some beautiful unique properties that made it very hard to price. You have to look at everything very carefully and sometimes think outside the box. For example. What is the highest and best use of the property? Pricing in a view or backing onto greenspace. A floor plan and paint color can add tremendous value or can decrease the value too. These are very subjective things to consider. The bottom line is that there is not exact price for a home, its always a range of value.
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