In the State of Georgia, as in most states throughout the United States, the average prospective home buyer(s) will usually select a licensed real estate agent who represents a licensed real estate broker in their neighborhood who will begin searching for a home in a particular location and/or subdivision. The real esate agent and the buyer(s) will usually meet and determine what type of home they are interested in, the price range and the location.  The real estate agent will begin the new home search by utilizing the buyer’s criteria and applying it to a wide variety of multiple listing services.  In some cases, the buyer(s) may initiate their own home search and actually find their new home for the real estate agent, who will then prepare the offer to purchase and represent the buyer’s interest in the negotiation process with the seller’s real estate agent. Unfortunately, the buyera(s), who is usually not able to pay all cash for the home, must first apply to a bank, mortgage broker, credit union and/or lending institution and file an application for a mortgage loan.  The mortgage lender will immediately check the credit status of the buyer(s) with the three credit repositories and determine, based on the mortgage lender’s criteria, exactly how much the buyer(s) may borrow and what the monthly mortgage payments shall be based on the rquired down payment and the longevity of the loan.

Assuming the buyer(s) qualify for the mortgage loan and the sales agreement is signed by all interested parties, the mortgage lender shall select and/or hire a residential real estate appraiser to determine the fair market value of the buyer(s) newly selected home, which shall represent the collateral for the loan and will protect the financial interest in sales transaction. The selected residential real estate appraiser will be responsible for determining the fair market value of the subject property utilizing three approaches to value: the market approach, the cost approach and the income approach.  In most cases the market approach and the cost approach would be most applicable since the new home is not an income producing property.  The real estate appraiser, utilizing his/her electronic data sources, would select four comparable property sales located within approximately one mile from the subject property for the appraisal report that are similar to the subject property in age, utility and design.  The real estate appraiser would make an appointment to conduct an on-site inspection for the purpose of inspecting the subject property utilizing an Inspection Form and/or the Uniform Residential Appraisal Report Form. During the physical inspection of
the subject property, the real estate appraiser would analyze, thorougly inspect and profesionally administer the following tasks:

1.  Describe the Neighborhood
2.  Read Planned Unit Development (PUD) Documents, if Applicable
3.  Site - Secure Plat of Survey
4.  Description of the Building/Structure
5.  Calculate the Replacement Cost of the Building/Struture
6.  Select Comparable Sales and Administer Monetary Adjustments
7.  Research the Property’s Sales History for Two Years
8.  Reconcile the Fair Market Value Based on Research and On-Site Inspection
9.  Make a Complete and Detailed Sketch of the Building/Structure
10.Comment on Required Repairs and/or Replacements
11.Photograph the Building/Structure and all Comparable Sales

It if hard to believe that the residential real estate appraiser is required to complete all of the above tasks and produce a complete, accurate and comprehensive twenty (20) page written residential real estate appraisal report for a fee of $300-$350.  The residential real estate appraiser must purchase errors and omissions insurance, specialized software, residential cost manuals, property data research time and spends hours in the office and in the field and and receives a fee of $300-$350 for each residential real estate appraisal report. The real estate appraiser provides the most important function in the real estate sales transaction and receives the least amount of monetary compensation for their efforts. The buyer(s), the
seller(s), the real estate agent and the mortgage lender all depend and rely on the fair  market value determined by the residential real estate appraiser and yet no one wants to properly compensate them for their professional efforts and expertise-WHY?  The reason is, that residential real estate appraisers in America have no legislative power and have no one to represent them in the Congress of the United States. Residential real estate appraisers in American will always be at the bottom of the pecking order until they are able to organize and assimilate the legislative power necessary in Washington, D.C. so that they may be properly heard and represented.  We can not continue to blame the residential real estate appraiser for all of the fradulent residential real estate transactions in the United States.  The residential real estate appraiser must be properly represented as a professional in the United States and receive adequate monetary compensation for the important work they perform for the buyer(s), seller(s), real estate agents and mortgage lenders.  Once again, the residential real estate appraiser does the most for the least in each real
estate sales transaction.

God Bless America!

Tags: Appraisal, appraiser, Continuing Education, education, Real Estate

This entry was posted on Sunday, September 7th, 2008 at 1:07 pm and is filed under Appraisal, Dr. Martin, Post-License, Pre-License, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.