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About Appraisals >Three Caballeros
When you buy a house or refinance your present home, your lender will ask you to pay for an appraisal to help ensure that the sales price and mortgage amount is consistent with the property's market value. The appraiser will look for "three caballeros" or three "comparables" -- homes that are very similar to the one you are buying -- and will make adjustments to reflect the differences between the properties.
Housing patterns tend to be homogenous, meaning that homes worth $300,000 are usually located in $300,000 neighborhoods. It is important for properties to be within the general pricing patterns of their neighborhoods because over-valued homes, even if they are exceptional, are sometimes difficult to sell at full market price.
This is not the only factor considered in determining the worth of a property, but it is an important one. The buyer or seller may view the property as a home or an investment, but lenders view it in a completely different way. To a lender, property means security in the event a borrower fails to repay a mortgage. Therefore, lenders must know real estate values in order to limit their risks.
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| Q |
Where can you find the world's largest residential palace?
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| A |
The Istana Nurul Iman, palace of the Sultan of Brunei, includes 2,152,782 square feet, 1,788 rooms, 257 bathrooms and a 110-car garage. |
 See More Real Estate Trivia > |
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