Appraise A House: 7 easy steps on home evaluationOctober 9, 2020
Greetings to the readers! The topic of this article is home valuation in Manchester. The article will be of interest to all those who already own a house, or those who are preparing to become the owner of real estate. Please note that at the end of the article you will find useful tips on how not to overpay when evaluating a house and appraise a house.
What is a home assessment and by whom?
To Appraise A House is a process, the end result of which is to establish its value.
The cost of a house is set by the laws of a market economy, that is, when buying and selling, it is determined by the amount for which the buyer is ready to buy the house and the seller to sell it. If the buyer and seller agree on how much the house is worth, then the deal is done. If one of the parties is not satisfied with the price, it means that this price does not meet the market conditions.
But often a house needs to be appraised not for the sale or purchase of an object. Then you need to conduct an independent assessment.
Such a procedure will be needed:
- when calculating the tax amount from the sale of a house ;
- when calculating the amount of contributions to the Pension Fund ;
- when calculating the amount of state duty ;
- for the mortgage , so like it usually does not exceed 80 – 90 % of the value of collateral ;
- when calculating the amount of contribution to the authorized capital ;
- when home – mortgaging property ;
- when the house is arrested ;
- in property disputes ;
- when dividing property;
- when paying insurance for the house ;
- with unfinished construction;
- when calculating for an investment project.
In what cases is it necessary to assess the house – an overview of the TOP-7 main situations
In this section, we will take a closer look at situations when you need to evaluate a home.
Situation 1. Registration of inheritance rights to Appraise A House
Assessment of a house for inheritance is carried out in order to calculate the notary fee, determine the amount of land tax and state duty, and resolve a property dispute between the heirs.
To assess the house, you need documents confirming the ownership and status of the house, encumbrances imposed on it and the customer’s passport.
If, together with a private house, a land plot in the territory adjacent to the house is also inherited, then the assessment of the land will also be added to the assessment of the house. From the documents for an independent cadastral home valuation, you will need a plot map, geodesy, documents on the status of land and communications.
Please note that if we are talking about inheritance, then the procedure for assessing the country house for the court will be different.
Situation 2. Conclusion of a sales contract
An appraisal of a residential building at the conclusion of a sale and purchase agreement is usually carried out at the stage of preliminary negotiations. In this case, the parties jointly select an appraiser.
Often, a pre-sale to Appraise A House is done to confirm the sale to third parties. Interested parties can be shareholders of an enterprise, tax service, and higher organizations.
For the tax authorities, the assessment is proof of the correctness and completeness of tax assessment. Please note that if the tax authorities have questions after the fact of concluding a sale and purchase transaction, the appraiser’s report will add significance to your argumentation.
An appraiser must be agreed upon and satisfy both the buyer and the seller. The appraiser’s payment should not depend on the result of the appraisal; it is negotiated in advance and fixed in the contract.
Situation 3. Assessment on the submission of the guardianship authorities to Appraise A House
The house is assessed by the provision of guardianship authorities in cases where the owner of the house or part of it is a minor child or an incapacitated person. In this case, without the permission of the board of trustees, it is impossible to sell, exchange or donate housing, as well as rent it out, mortgage or perform other operations.
The mechanism of the board of trustees is needed to prevent infringement of rights and to respect the interests of a minor or a disabled person.
A guardianship home should be assessed when:
- selling a house;
- renting out;
- registration of a house as collateral;
- section of the house;
- allocation of a share in the house; carrying out other transactions with the house that may affect the rights of the person under guardianship.
It is necessary to prepare the documents on ownership, technical passport and passport of the customer, necessary for the assessment of a residential building.
As in other cases, the result of the appraisal is a conclusion confirming the market value, with attached documents of title.
If the sale of the house was made without obtaining the consent of the guardianship authorities, the court may declare this transaction invalid and prosecute the person who provided false data.
Situation 4. Home insurance
If the insured amount is less than the market value, the insurance is considered incomplete, and the compensation will be paid in part upon the occurrence of the insured event. They will be paid based on the market value of the house, in proportion to its value.
It is because of the above aspects of the law that an independent assessment procedure is carried out before home insurance.
Why do you need to Appraise A House?
Please note that the maximum payment of the insurance company is equal to the cost of building a new house, identical in parameters. But there is also a nuance here. When it comes to home insurance, the sum insured will still not be equal to its market value. The reason is in the value of the land on which the house is built. This creates room for interpretation of the count.
The way out is to insure the house without a land plot, and determine the insurance value with the help of an appraiser. In this case, there will be no vicissitudes of interpretations.
Situation 5. Making a house in the authorized capital of the company
Contribution to the authorized capital of the organization helps to detail the rights of the participants to make decisions. In addition, with the correct assessment of the contribution, the property tax and depreciation costs are calculated correctly. Therefore, when adding a house to the authorized capital, it is important to correctly assess its value.
Please note that the monetary value of the property contribution to which the house belongs is carried out by agreement of the founders. But the amount of this assessment cannot exceed the amount at which the house was assessed by an independent appraiser.
The transfer of property as a contribution, according to the law, is considered an investment, and not a way to realize it.
Situation 6. Partitioning the house
In case of divorce or other disputes about the division of the house, in order for one of the parties to relinquish its property rights, the other party must pay compensation.
To determine the amount of compensation, you need the service of an appraiser. He will determine the value of the house along with the land. And based on this amount, the parties will come to an agreement.
The division of the house is resorted to when liquidating an enterprise, when leaving share owners, when selling a share, allocating a share, or divorce. These actions are often carried out with the help of a notary.
Alla and Boris are getting divorced. Boris ordered an appraisal of the country house from an appraisal company. The company valued the house at an amount that Alla does not agree with. To solve this situation, Alla needs to persuade her husband to re-evaluate. And the new appraiser should be jointly chosen. And jointly conclude an agreement with him.
If it is not possible to agree with the ex-husband, it is necessary to conduct an examination of the controversial report for reliability. Such an examination should be carried out by the SRO of the appraiser.
Situation 7. Getting a loan to Appraise A House
Typically, the loan amount is equal to 80% of the value of the mortgaged property. For this reason, the appraisal of a house and land is a prerequisite when using it as collateral for a mortgage.
In this case, the appraisal must be carried out by a professional appraisal company certified by the bank.
The bank does not impose a specific contractor, but provides a list of certified appraisers, from which they choose.
3. How to make an assessment of a house with a land plot – step-by-step instructions for beginners
To evaluate a house with a land plot, you need to take a number of actions. Let’s understand which ones and analyze their specifics.
Step 1. Choosing an appraisal company
First you need to choose an appraisal company. Please note that depending on the purpose of the appraisal, you may need to have the appraiser certified. This is especially true if an assessment is needed for an insurance company or bank. If the appraiser is not certified, the company simply will not accept its results.
Also consider the reputation of the firm. Mandatory conditions – the company is a member of the SRO and has insured its civil liability.
Step 2. We invite specialists to the object
Before inviting an appraiser to your home, clean it up. Clear all hard-to-reach areas of the house, such as the basement and attic, so that they can be easily viewed.
Be sure to check faucets, pipes, handles and other small technical details. They should work fine.
The final cost in the report depends on how carefully you prepare for the arrival of a specialist.
Step 3. Determine the cost zone by the location of the home ownership
The value of your home depends on where exactly is located. Indeed, in every city there are prestigious areas and, for example, sleeping areas. The cost may be affected by the remoteness of the house from transport interchanges and infrastructure, the environmental situation in the area of the facility location, noise level, etc.
Determine which value zone you are entering and form a lower and upper price bar for yourself in this zone.
Step 4. Determine the value of the land to Appraise A House
Dozens of different factors influence the cost of a land plot.
Table of factors affecting the value of land:
No. Co-pay factor Factor for discount
1 More than 3 acres of land + 2-3% Less than 3 acres of land -2-3%
2 Plot of the correct shape + 2% Plot of irregular shape -2-3%
3 Width over 12 m + 1-4% Width less than 12 m -2-15%
4 Proximity to transport interchanges + 1-5% Distance from the bus stop -5-8%
five Asphalt road + 2% Unpaved road
6 Natural conditions The proximity of high-rise buildings -3-4% The proximity of industrial facilities -5-10%
7 Smooth relief + 3-5% Slope -5-7%, groundwater -10-20%
8 The presence of a central sewerage system – + 7-10% There is no gas or water -5-15%
nine Separate entrance Common entrance -30%, common yard -50%
Step 5. Determine the cost of the main building
To do this, you need to determine the net area of home ownership. For this, the area of the foundation is multiplied by the number of floors. Extensions, basements, garages and verandas are not included in this calculation.
Then the cost per square meter of area is estimated taking into account the sum of discounts and surcharges.
Table of reasons for a decrease or increase in the value of a house:
No. Co-payment factors Factors for discount
1 Brick walls Shell rock walls -5-8%
2 Home is less than 7 years old + 5-10% House 8-20 years -5-15%
3 The area is more than 80 sq. M. + 1-3% Area less than 55 meters – 2-5%
4 Modern project + 5% Old project – 1-5%
five Turnkey + 15-30% Construction not completed – 60%
6 Pipes overhauled + 5-10% Old pipes and plumbing -5-10%
7 No repair needed It is necessary to carry out repairs – 10-30%
8 Separate rooms + 5% Connecting rooms -5%
9 There are amenities – surcharge 0% Partial amenities – 10% No amenities – 20%
10 High ceilings – 0% surcharge Ceilings less than 2.6 meters – 10%
Step 6. Determine the cost of additional buildings on the site
You need to understand the approximate cost of these buildings in themselves. We took into account their influence on the price of the house and the plot earlier.
To calculate the cost of additional buildings – just determine the cost of their construction.
Step 7. Get a report on the total cost of housing to Appraise A House
Now we determine the total cost. To do this, we summarize the cost of the house, land plot and additional buildings.
Legal advice will be an indispensable help in the difficult matter of assessing a house. You can find a specialized specialist on the internet. Of the 16.5 thousand lawyers from all over the country, you can easily find the right one. If you ask a question on their website, you will receive an answer in 15 minutes.
You can use the consultation by filling out the form on the website or ordering a call back.