Purpose of Appraisal

Why do you need an appraisal?

An appraisal gives you an unbiased, professional opinion of market value, whether you are selling, appealing your taxes, removing PMI, or settling a divorce or estate.

Selling Your House

If you price your property below market value, it will sell quickly, but you will lose money. If you price it above market value, it may sit unsold month after month. If it is priced far above market value, buyers will not even come to look at it.

An appraisal is the best tool to determine fair market value. Real estate agents often tell homeowners what they want to hear in the hope of a listing agreement, even when you plan to sell "By Owner." An appraisal is unbiased and is a much more thorough process than a Comparative Market Analysis (CMA) done by a Realtor.

Property Tax Assessments

Challenging a tax assessment has become a necessity, and most people go into these challenges unprepared. They may pull some information from the Internet to support their claims, but have no real basis for them.

A real estate appraiser can provide an accurate answer to the question of value. While a full appraisal may not be cost effective to save a few hundred dollars on your tax bill, an appraiser can usually do a limited appraisal for a fraction of the cost, with the same accuracy and integrity. An appraisal from a qualified appraiser is the right step to take in any dispute with your local tax assessor.

Private Mortgage Insurance (PMI) Removal

Private Mortgage Insurance (PMI) is supplemental insurance that lenders require when the amount of the loan is more than 80% of the value of the home (the loan-to-value ratio). This payment is often part of the monthly mortgage payment and is quickly forgotten.

After values rise and/or the principal is paid down below this 80% level, PMI may no longer be required. The United States Congress passed the Homeowners Protection Act of 1998, which requires lenders to remove PMI when the loan-to-value conditions are met. An appraisal is required to determine the value of the property.

Divorce

In this unfortunate circumstance, an appraisal gives both parties a fair and impartial value, so that they can concentrate on more important matters during a difficult time.

An appraisal by a qualified, independent third party is often required by state law to settle a divorce.

Estate Planning

In times of loss, it is often difficult to think of the many steps necessary to settle the affairs of the deceased.

An appraisal is required to establish the fair market value of any real estate in the estate, for tax filings and for presentation to multiple heirs. An appraisal is a necessity to settle the estate properly.

Mortgage lending: if you need an appraisal for a lending transaction, the bank or mortgage company must order the appraisal.

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