Appraisal

• Lenders typically bring in an appraiser to assess a foreclosed home once an offer has been made. Most of the time, when an appraisal is done, it accurately reflects the current market price of the home. The appraisal of a home can, however, be affected by the value of any homes in the neighborhood that have been sold in the last 6 months. Likewise, because appraisers do not usually guarantee or check the legal boundaries of foreclosed properties, or inspect the interior of such homes, as they are often neglected, the value that the appraiser assigns may or may not accurately reflect the home's value.
  
  

Uniform Standards for Professional Appraisal Practice

• If you have just received an appraisal report on a foreclosed home, one of the most important questions that you should ask is whether or not the appraisal report meets the Uniform Standards for Professional Appraisal Practice, or USPAP. An appraisal the meets these standards is done by either a state-licensed or -certified appraiser who conducts the appraisal in a manner that is consistent with those methods generally accepted within the profession.
  
  

Complete or Limited

• Appraisal reports consist of two categories: complete reports and limited reports. If an appraisal report is complete it not only meets the standards of the USPAP, but also includes comprehensive details that show how the appraisal price was determined. If an appraisal report is limited, it may be significantly less detailed than a complete report and contain a minimum amount of detail written in summary format. It may or may not meet USPAP standards. Potential home buyers may want to bring in a private appraiser if they believe that the report they receive is insufficient.
  
  

Flood Zone

• Because appraisers do not usually assess the interior of a foreclosed home, which includes checking basements for water damage, potential home owners should always inquire about the geographic location of a foreclosed home. An appraiser should be able to tell you if the property that has been appraised is located in a flood zone, as determined by the Federal Emergency Management Agency. A knowledgeable appraiser should be able to answer any questions that you may have about the determination of the home's value.