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New Construction Appraisal

A new construction appraisal is a required step in order for a purchase of a property to take place. The new construction appraisal gives an estimated value of the property, which allows potential buyers to know how much the property should cost. A new construction appraisal is especially important when the potential buyer will be taking out a loan to help pay for the purchase cost.

A new construction appraisal can take place at any time during the construction process and is usually requested by the buyer, even though the construction company or seller can also ask for a valuation. A new construction appraisal is done by an independent third party, even though they may have a past history with a seller, buyer, realtor or mortgage company.

A new construction appraisal reviews all aspects of the construction, from the size of the building to the materials used and the quality of the workmanship. The location of the building also plays a role in the new construction appraisal. A high-quality home or office building in a less prosperous neighborhood may receive a lesser value in an appraisal than the same building in a good area through no fault of its own.

During a new construction appraisal, the property is compared to several other properties of a similar size in a similar location--if possible, the same area or subdivision. The appraised value of these buildings are used to help determine the appraised value of the new construction.

Once the new construction appraisal is complete, a potential buyer can negotiate with a lender or mortgage company to get the money needed to complete the sale. The lender needs the appraisal to learn how much money their client will be borrowing and whether or not they are financially capable of taking on such a loan.

Another kind of new construction appraisal is done by state or local governments for tax purposes. The new construction appraisal is done to determine how much the owner of the property will have to pay yearly in property taxes, the amount of which can change on a yearly basis.

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