Don?t Rely Excessively On Appraisals

Getting an appraisal on a home is a fundamental aspect of making a purchase. While appraisals are certainly helpful, you should not put too much stock in them.

An appraisal is a valuation of a property by an independent appraiser. The appraiser does an evaluation of the home, considers the home in comparison to others of comparable type and so on. Once completed, the appraiser then issues a written appraisal value of the home. Many homebuyers make the assumption the appraisal is the true value of the home both now and in the future. This can be a dangerous assumption.

First, appraisals are limited by something known as a moment in time. The appraisal done today, may not be entirely relevant a month or two later. If a property has been on the market for a few months, the appraisal may not reflect a slowing market. This, in turn, means the appraised value is actually higher than the current market will support. Homebuyers run into problems when this occurs because they put too much value on the appraisal. A seller will often list the home below the appraised amount and homebuyers will think they are getting a deal. In reality, they are not and may actually be paying more than a new appraisal would support. The older the appraisal, the less value you should put into it.

Most homebuyers assume an appraiser inspects the home for defects and discounts the value of the home accordingly. This is not really the case. An appraiser is not really doing a critical home inspection. In fact, the appraiser contract and/or report usually contains a long disclaimer whereby the appraiser covers his derriere by noting he assumes the property is in good condition and isn?t liable if it is not. Obviously, that should scare you. This, of course, is why you should insist on a home inspection for any property you make an offer on.

An appraisal is a solid part of the equation when considering a home purchase. It is not, however, the piece de resistance when valuing the property.

Posted by Tom Barnard on December 13, 2008 at 12:00 AM

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Tom Barnard is affliated with Harrington Realty, which is located in Milford, DE. For further assistance please use the contact information located on the right.

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Local Information for Milford, DE

Latitude: 38.91284 -- Longitude: -75.429327

ZIP Codes for Milford, Delaware	19963
Area Code for Milford, Delaware	302
Time zone for Milford, Delaware	EST

Other Area Cities: Smyrna, DE Milford, DE Dover, DE

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As of the census of 2000, there were 6,732 people, 2,665 households, and 1,700 families residing in the city. The population density was 467.5/km² (1,210.2/mi²). There were 2,897 housing units at an average density of 201.2/km² (520.8/mi²). The racial makeup of the city was 67.97% White, 23.26% African American, 0.34% Native American, 1.04% Asian, 0.16% Pacific Islander, 4.25% from other races, and 2.97% from two or more races. Hispanic or Latino of any race were 8.82% of the population. There were 2,665 households out of which 32.6% had children under the age of 18 living with them, 42.6% were married couples living together, 16.8% had a female householder with no husband present, and 36.2% were non-families. 31.2% of all households were made up of individuals and 15.5% had someone living alone who was 65 years of age or older. The average household size was 2.44 and the average family size was 3.03. -- Source: Wikipedia.com

Delaware 2000 Census Population Profile Map

	Milford	Delaware	United States
Population	6,732	783,600	281,421,906
Median age	35.1	36	35.3
Median age for Male	32.9	34.9	34
Median age for Female	37.5	37.1	36.5
Households	2,665	298,736	105,480,101
Household population	6,492	759,017	273,643,273
Average household size	2.44	2.54	2.59
Families	1,699	204,590	71,787,347
Average family size	3.03	3.04	3.14
Housing units	2,897	343,072	115,904,641
Occupied units	2,665	298,736	105,480,101
Vacant units	232	44,336	10,424,540

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Don?t Rely Excessively On Appraisals

Local Information for Milford, DE

Latitude: 38.91284 -- Longitude: -75.429327

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