Purpose of Appraisals

Why Do You Need An Appraisal?

Selling Your House

If you price your property below market price, it’ll be snapped up quickly. Of course you will lose a lot of money. If you price your property above market price, it may sit there unsold month after month. If it’s priced very much above market price, people won’t even come and look at it. An appraisal is the best tool to determine fair market value. Real estate agents often tell the homeowner what they want to hear hoping to get a listing agreement, even if you indicate you want to sell "By Owner." An appraisal is unbiased and is a much more thorough process than a CMA (Competitive Market Analysis) done by Realtors.

 

Property Tax Assessments

Challenging the tax assessment has become a necessity and most people go into these challenges unarmed. They may pull some information from the Internet to support their claims, but have no real basis for their claims. A real estate appraiser can provide the accurate answers to the question of value. While it may not be cost effective to order a full appraisal to save a few hundred off your tax bill, usually an appraiser can do a limited appraisal for a faction of the cost, yet with the same accuracy and integrity. An appraisal from a qualified appraiser would be a the right step to take in any dispute with your local tax assessor.

 

Private Mortgage Insurance (PMI) Removal

Private Mortgage Insurance or PMI is the supplemental insurance that lenders have to purchase when the amount being loaned is more than 80% of the value of the home. (loan-to-value ratio) This additional payment is often folded into the monthly mortgage payment and is quickly forgotten. After a rise in values and/or payment to principal goes below this 80% level PMI is no longer required. United States Congress passed the Homeowners Protection Act of 1998 that requires lenders to remove the PMI payments when the loan-to-value ratio conditions have been met. An appraisal is required to determine the property's value.

 

Divorce

In this unfortunate circumstances, appraisals are required so that both parties involved receive a fair and impartial value so that they can concentrate on more important aspects of this difficult time. An appraisal by a qualified independent professional third party is often required by state law to settle the divorce.

 

Estate Planning

In times of loss, it is often difficult to think of the various steps that must be taken to resolve any outstanding monies of the deceased. An appraisal is required to establish fair market values of any real estate properties in the estate for tax filings and any presentation to multiple heirs. The aid of an appraisal is a necessity to dispose of the estate properly.

 

Please note, if you need an appraisal for a lending transaction the bank/mortgage company will need to order the appraisal.