You Need To Know The Steps To Evaluate A Private Home

Home appraisal refers to the process by which its value is established. This happens under the influence of the laws of the market economy; that is, during the sale and purchase, the establishment of the amount for which the given property is ready to buy, and the seller is ready to sell takes place.

In the case when the seller and the buyer agree on the price, a transaction takes place. In case one client doesn’t agree with the price, then the named price does not meet market conditions. So, it is not uncommon for a house to be appraised, not only during the purchase and sale. It is in these cases that an independent assessment is needed.

Cases when you may need an independent assessment:

• To calculate the tax amount for the sale of a house;

• To calculate the amount of contributions to the pension fund;

• To calculate the amount of state duty;

• For a mortgage;

• To calculate the amount of contribution to the authorized capital;

• If the house is collateral;

• If the house is arrested;

• In case of property disputes;

• During the division of property;

• To calculate the amount paid for home insurance;

• If construction is not completed;

• To calculate the amount for an investment project.

You can order a home appraisal from individuals or individuals who are members of a specialized SRO and have a civil liability insurance policy.

The main cases in which a home assessment is necessary

Inheritance houses are evaluated to calculate the notary fee, determine the amount of land tax and state tax, and also to resolve property disputes between the heirs.

In the case of inheritance of a land plot adjacent to a house, an assessment of the land is also required. In this case, from the documents, you will need a map of the site, documents on the status of the land, geodesy, and documents on communications.

Conclusion of a sales contract

The assessment of the house, in this case, mainly takes place during preliminary negotiations. Then the parties can choose an appraiser together.

It is not uncommon for a house to be assessed before being sold to third parties. Such persons can be the tax service, shareholders of the enterprise, higher organizations. For the tax authorities, the assessment carried out is proof of the completeness and correctness of the tax calculation.

The buyer and seller find an appraiser together. The cost of payment to the appraiser is immediately negotiated and recorded in the contract. How much the home assessment costs does not depend on the results of the assessment.

Assessment for the provision of guardianship authorities

Such an assessment is carried out when the owner of the house or part of it is an incapacitated person or a minor child. In this case, no transactions can be made with the house without the permission of the board of trustees. This is necessary so that the rights of an incapacitated person or a minor are not infringed upon.

Assessment of a house for the guardianship authorities is carried out during the sale, lease, division of the house, registration of the house as collateral, allocation of a share in the house, as well as other operations. For the assessment, it is necessary to prepare property documents, customer passport, and technical passport. The result of the appraisal is a conclusion that confirms the market value.

Home insurance

According to the rules and laws, the insurance contract will be considered invalid if the value of the house is higher than the market value. Then, upon the occurrence of an insured event, the amount will be partially reimbursed.

The maximum that the insurance company pays is equal to the amount of the construction of a new house with the same parameters. However, the amount insured will still not be identical to its market value. This is because the land on which the house stands also has a value. This gives room for different counting options.

The way out of this situation is to ensure a house without a plot and determine the cost of insurance with the help of an appraiser. Then there should be no different interpretations.

Adding a house to the authorized capital of the company

This helps to detail the participants’ decision-making rights. In addition, the correct assessment of the contribution, depreciation costs, and property tax are calculated correctly. It is for this reason that the value of the house must be estimated correctly when it is contributed to the authorized capital.

House section

Houses are divided in case of divorce or other disputes. As a result, it is necessary that one of the parties relinquished its rights to a part of the house, and the other paid her compensation. To determine the amount of compensation, it is necessary to evaluate the house. The appraiser will evaluate the house with the land plot. Well, knowing this amount, you can come to an agreement between the parties.

Houses are divided when an enterprise is liquidated, when a share is sold, in divorce, when a share is allocated, when a shareowner leave.

Getting a loan

The loan amount is generally 80% of the price of the mortgaged property. Because of this, an appraisal of a home is a must if it is used as collateral for a mortgage. In this case, the assessment of a home for a mortgage must be carried out by a professional appraiser company. Moreover, this company must be certified by a bank.

REFERENCE! The bank should not impose any particular contractor; it only offers to consider a list of certified appraisers from which you can choose.

Step-by-step instructions for evaluating a private house

First, you need to choose a company to evaluate a private home. Please note that depending on the purpose of the appraisal, you may need a certified appraiser. This is especially important if the appraisal is needed for a bank or insurance company. If the appraiser does not have certification, the company will not accept its results.

Inviting specialists to the object

Before coming to the house of appraisers, it is imperative to clean it up. It is necessary to free all corners, as well as the basement and attic if any. All this should be available for inspection. Also, be sure to check pipes, taps, handles, and other little things. All of this should work fine.

  • Determination of the prestige of the area of the city in which the house is located
  • The cost depends on the location of your home. In any city, there are prestigious districts, and there are sleeping or even dysfunctional ones. The total cost is influenced by the remoteness of the house from the infrastructure and transport interchanges, the noise level, the environmental situation, and so on.
  • Calculating the value of a land plot
  • This amount is influenced by many different factors, such as:
  • The size of the plot (if it is more than three acres, then this adds 2-3% to the cost; if less, then it reduces 2-3%);
  • Whether it is correct or incorrect;
  • Its width is more or less 12 meters;

• How close are transport interchanges;

• The road is covered with asphalt or not;

• Natural conditions, whether or not industrial objects are close;

• Flat relief of the site or with a slope;

• Whether or not there is a central sewerage system;

• Separate entrance (shared entrance with someone reduces the cost up to 30%).

Determining the cost of the main building

To determine the cost, you need to find out the net area of the house. To do this, you need to multiply the area of the foundation by the number of floors. This does not include verandas, basements, outbuildings, garage.

After that, the cost of one square meter is estimated, taking into account discounts or surcharges, depending on the following factors:

  • Brick walls near the house or from shell rock;
  • The age of the house (if it is less than seven years old, then 5-10% is added, if the house is 8-20 years old, then 5-15% decreases);
  • House area;
  • Modern or old project near the house;
  • The house is turnkey ready, or construction is not completed;
  • New or old pipes in the house;
  • Whether the house needs repairs or not;
  • Separate or adjacent rooms;
  • Are there amenities in the house or not;
  • High or low ceilings.

Determination of the cost of additional buildings on the site

You need to find out the approximate cost of these buildings separately. We found out how they affect the total cost above. To calculate the cost of additional buildings, you just need to calculate the cost of their construction.

Receiving a report on the final cost of the house

Now it’s time to determine the final cost. To do this, add up the price for the house, plot, and additional buildings. A good help in assessing a home would be legal advice.

3 Tips to Save on Home Valuation

It’s not always a good idea to skimp on valuing a home, but there are several ways to do this. Before that, it is necessary to carefully weigh all possible risks and make a final decision.

Services of private appraisers

To save money, you can use the services of private appraisers, because their services are cheaper. However, in this case, the appraiser must have a good reputation and have insurance.

The opportunity to use the services of a private trader is possible in cases where you were not directed to this by a bank, insurance company, or other institution. Then the appraiser must be accredited by that institution.

Assessment of individual objects independently

You can do your home assessment yourself. To do this, use the recommendations and tables of factors. This in-house analysis may be suitable if you need an estimate to form the sales value. If the appraisal is needed for a court, bank, or insurance company, then you will have to turn to professional appraisers.

Online home appraisal

There are a large number of sites where you can do your home appraisal online. To do this, you need to fill in the required fields with reliable information and then get the final result. This method is suitable for assessing a home for personal purposes but not suitable for banks, courts, and insurance companies.

Conclusion

After reading this article, you learned how an independent appraisal of a private house works and for what purposes it may be needed. We also learned how such an assessment takes place, and in what cases it is needed.

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