Factors that Dramatically Change an Appraisal

Have you recently had a home appraisal carried out on your property? Were you disappointed or concerned about the low market value of your home indicated by your appraisal? There are several reasons why you may have received a lower appraisal than you were expecting.

To understand why low appraisals come about, you need to know something about the property market. Just like the stock market, the property or real estate market is forever fluctuating. This means that market value will increase and decrease many times during a year. Sometimes these fluctuations are hardly felt, other times they can have a significant influence on the industry and on the habits of people who buy and sell property.

You also need to factor in the law of supply and demand. In a popular neighborhood, there may be less property for sale. This means that when a house is put on the market, several parties may be interested in it. This will push its market value up. When this situation extends to other properties, it creates what is known as a seller's market because the seller can dictate the price.

On the other hand, if there are many houses for sale and the property market is slow, market values may be low. This is because it is a buyer's market. A home appraisal compares your home's value to the market value of other homes in your local area. If some homes are being sold off cheaply, your market value will be lower.

Aside from the property market, you may find that the experience and professionalism of your appraisal firm has a strong bearing on your appraisal. If your appraiser is inexperienced he may make errors when comparing your home to others in the area, or he may write down incorrect information concerning the age or condition of your home. This is why you should always read his report thoroughly when it is presented to you and get a second opinion if you feel the market value of your home is too low.