~The role of the appraiser is to produce a credible opinion of value that reflects the current market.  Appraisers are not responsible for setting the value of the home and they also do not confirm a home’s sale price.  According to David S. Bunton, President of The Appraisal Foundation, “Appraisers provide an analysis of the collateral, so that lenders understand the value of a property when making the loan decision.”  The aforementioned is a quote and definition from The Real Estate Book and I really like it!!!

So many times folks are under the impression that they must get an appraisal to evaluate the value of a home when in reality an appraisal is for the value of the Loan!  Realtors do what is called CMA (competitive market analysis)...which helps to ascertain the value of the market and lend help in a seller deciding upon a listing price and then the seller and buyer agree upon the sales price when negotiations are completed.  Myself as well as teaching my agents strive to be sure when we do an analysis for a seller when listing or a buyer when ready to make an offer, that we search the market history (usually the last six months) and ensure we can find at least THREE comparable properties because we know from experience that is what an appraiser will strive to do in order to valuate for the loan process.  If the buyer is a cash buyer, there have been time they will use just the CMA or broker opinion because that reflects the market and there is no loan involved.  Keep in mind if you are a homeowner and wish to add a pool, you WILL need an updated appraisal IF you are securing a loan to add the pool because in Texas you must have equity to cover the valuation of that swimming pool.  If you are paying cash and no bank involved, then you may want to ask a real estate professional to run you a market analysis to ensure you are not overimproving...but most savvy homeowners will know if their neighborhood warrants various types of improvements and/or enhancements.  But if you're in doubt...call your real estate professional!!!