Stay Focused S2 Ep37: Word of the Month
This week Erik and Randal talk about another oft-used word in real estate: Appraisal.
Randal: All right. Welcome back to Stay Focused, Focus Real Estate's weekly video blog. Here today to talk about our word of the month. What should our word of the month be?
Randal: Appraisal. Why not?
Erik: What is an appraisal?
Randal: Yeah, just a really quickie here, just to kind of spotlight the difference between a couple of terms that we see in the marketplace. There's assessment, there's appraisal, there's opinion of value. And in the state of Massachusetts, appraisal is a licensed profession.
Erik: Yeah. There's actually a profession or people that are called appraisers that ...
Randal: That do appraisals?
Erik: ... that do appraisals.
Randal: That's awesome.
Erik: I know. Can you imagine?
Randal: But it's very different from a ... Now I'm just going to laugh at my own joke, right? Or your joke? Anyway, so the appraisers. What their job is to do is way more scientific than what we do.
Erik: Yeah. They have very strict ...
Erik: ... guidelines in which they have to comply with when they're doing an official appraisal that they have to comply with.
Randal: Guidelines on the area around the home that they can use. They have a distance requirement. They have community requirements. They have all kinds of different things that they have to-
Erik: Number of comparables that they can or can't use.
Randal: The age of the comparable. And then, also, they get really, really detailed into what's the value of a fireplace, what's the value of a parking spot, what's the value of a half-bath, so they can kind of subtract and add based on ...
Randal: ... other comparables in the marketplace. Why do you need an appraisal, Erik?
Erik: Well, appraisals are-
Randal: Do we need an appraisal?
Erik: Well, if you are buying a house and getting a mortgage, you need an appraisal, or refinancing your house. Mortgage companies require that the houses be appraised, because they're lending you the money. They want to make sure that the house that you're buying is actually worth the amount that they're going to give you, or more.
Randal: Fair enough.
Erik: They will actually hire, which you will pay for in your closing costs for your refinance or your purchase, they will hire the appraiser to come out, do an official appraisal of the home, and that's usually when most people need an appraisal.
Erik: Hopefully this helps you understand a little bit more about what an appraisal is and who an appraiser is. If you have more questions, feel free to comment below or drop us a line.
Randal: Yep. Thanks for watching today. Don't forget to like us on Facebook.
Erik: And subscribe to our YouTube channel.
Randal: Until next time, Stay Tuned and Stay Focused.
Erik: Stay Tuned and Stay Focused.