Home in foreclosure or homes that have reverted back to institution’s ownership normally come with unique appraisal challenges and when you are considering purchasing a foreclosed home, a foreclosure appraisal is recommended before you make the purchase. The purpose of the appraisal is to let you have a detailed report about the estimated value of the property you are considering to purchase.
How an appraisal on a foreclosed home works
To get a good understanding of how a foreclosure appraisal works, it is important that you first understand the various methods used in such an appraisal. The following are some of the methods most appraisers tend to use when doing foreclosure appraisals-:
Foreclosures have low appraisals
It is a general trend in the industry that most of the foreclosed houses will be appraised lower than other similar properties with similar features. Various reasons could be responsible for this, such as neglect or vandalism which may contribute to the damage or the overall dilapidation of the property. Therefore, just have in mind that a foreclosed appraisal will always be lower than what you would have expected in normal similar properties.
Property owners will be adamant to allow for the inspection
Most owners of properties in foreclosure will be unwilling to allow an appraisal of the property. Either it is because they don’t want to lose the property or they simply feel bad about letting it go. Your appraiser will have to find a way of dealing with them if they prove to be adamant about the appraisal.