The Value of an Appraisal to a Home Buyer

Home Appraisals
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California resident Jim Knell is a real estate executive with decades of industry experience. In addition to early career experience as an independent investor, Jim Knell is the founder and chairman of SIMA Corporation, a property management and development firm that provides comprehensive real estate management and investment services.

An important component of any real estate transaction is the property appraisal. Conducted by a professional licensed in the field, an appraisal is the process through which the value of real estate is estimated.

An appraiser will evaluate market conditions as well as the size, features, and condition of the house to determine an estimated market value. This process takes place in most real estate transactions and offers protection to the buyer. If an appraisal returns a value higher than the purchase price, the buyer is getting a bargain and will gain equity in the property. However, if the appraisal is lower, the buyer may be protected from overpaying by negotiating a lower purchase price.