Why do a real estate appraisal?

Why do a real estate appraisal? How to do it

Real estate appraisal services can be required in a wide variety of situations. For example, before applying for a mortgage loan, you will need to pre-evaluate the property, which will act as collateral for the loan. And this is exactly the situation we will consider in this article. For banks, issuing mortgage loans is a very risky transaction and therefore they want a good guarantee in the form of real estate to reduce their risks.


The main risk for the bank is that the borrower will not be able to repay the loan. And accordingly, in this case, the financial company requires its client to provide real estate, which will act as collateral for the loan. Any liquid real estate can be used as collateral, which will become the property of a financial institution in cases where the borrower becomes insolvent. And accordingly, the appraisal of a property is a key factor that a financial institution pays attention to when issuing a mortgage loan.

About real estate appraisers

To assess the market value of the object, for this task professional appraisers are involved, who, based on the results of their work, issue a report to the client. And the decision of the bank as to whether the financial institution will be able to provide a loan depends on the effectiveness of the assessment. At the same time, such a report is sent to the insurance company. Having determined the cost and liquidity of the property, the financial institution will know exactly at what price in case of the borrower’s insolvency, it will be possible to quickly sell the property.

What affects the cost?

The final cost of a property can be influenced by a variety of factors. Therefore, when performing an assessment, specialists take into account many factors and features that ultimately help them make the right decision. Often, the development of infrastructure and a number of other features can affect the final cost of an object. But the condition of the building also significantly affects the cost. For example, if an apartment is located in a Soviet-era building, then it will not be valued at the highest amount.

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