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PMI / MIP Removal Savings
What is an Appraisal?
How is
Market Value Determined?
Who Needs An
Appraisal?
Home Appraisal
vs Home Inspection
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How is Market Value Determined?
There are three primary approaches that an appraiser bases
his professional opinion:
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Direct Comparison Approach - This approach utilizes
the theory that a willing buyer and willing seller of a comparable properties
will provide a good estimation of the value of the property under review.
The appraiser will review the selling price and asking (listing price)
of equivalent properties.
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Cost Approach - This approach estimates the cost to
build an identical home or building at current construction costs less
any accumulated depreciation. This value is then added to the value
of the underlying land to arrive at an estimation of market value.
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Income Stream - This approach is generally used to estimate
the value of income producing properties by calculating the present
value (in today's dollars) of future income streams generated by the
property if the property is put to its "best use."
The appraiser will arrive at his or her estimated opinion
of value by selecting the most appropriate approach based on the nature
of the property that can be supported by relevant market data.
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