Reasons to Get an Appraisal
Refer to the main reason you want to get an appraisal. Every year, countless people in the United States buy, sell, or refinance their slice of the American Dream. Most, if not all, of these transactions involve a simple line item for an appraisal, and it has become an understood and accepted part of any real estate transaction. People want to bring in the expert to make sure they're not spending too much on their property.
Still, this is not the only reason appraisals are made. There are many other reasons the services of a certified, licensed, independent real estate professional might come in handy.
One of the most important issues involved in purchasing a property is how much it's worth so that you can make an informed offer. A professional appraisal report performed by a qualified, state-licensed appraiser can provide you with an objective, third-party opinion of a property's current market value. For the small price of this service, you can give yourself "peace of mind" before making the purchase.
Home Purchase
Home Refinancing
If you need to consolidate bills, have college tuition to pay, or just want to tap into the equity of your home, you'll need a new loan, which oftentimes requires a new appraisal of your property.
PMI Removal
Private Mortgage Insurance or PMI, is the supplemental insurance that many lenders ask home buyers to purchase when the amount being loaned is more than 80% of the value of the home. Often, this additional payment is folded into the monthly mortgage payment and is quickly forgotten. This is unfortunate because PMI becomes unnecessary when the remaining balance of the loan - whether through market appreciation or principal paydown - dips below this 80% level.
In fact, the United States Congress passed a law in 1998 (the Homeowners Protection Act of 1998) that requires lenders to remove the PMI payments when the loan-to-value ratio conditions have been met. Many appraisers offer a specific service for homeowners that they believe meets the 80% loan-to-value metric. For a nominal fee, the appraiser can provide you with a statement regarding the home value. Some will even take it further by helping you file a challenge with your mortgage company. The costs of these services are often recovered in just a few months of not paying the PMI.
Divorce Settlement
A divorce can be a particularly traumatic experience for the parties involved and is often further complicated by the issue of "Who gets the house?". In most divorce cases, the court won't usually force the parties involved to "buy out" the other party's interest, but it may order the sale of the home so each party gets an equal share of the equity.
Regardless of the situation, it's a good idea to get an appraisal so both parties are fully aware of what the true market value of the property is. If the parties want to sell it, they'll have a better idea of what price to set. On the flip side, if a "buyout" is the chosen option, both parties will feel like they've gotten a fair assessment.
Estate Liquidation
The loss of a loved one is a difficult time in life, and settling an estate from a death or probate often requires an appraisal to establish Fair Market Value for the residential property involved. The ethics provision within the Uniform Standards of Professional Appraisal Practice (USPAP) binds us with confidentiality, ensuring the fullest degree of discretion.
Unlike many wealthy individuals, the majority of Americans do not have dedicated estate planners or executors to handle estate issues. Additionally, in most cases, a home or some other real property makes up a disproportionate share of the total estate value, but an appraisal can be helpful.
The first step in fairly disposing of an estate is to understand its true value. Where a property is involved, the appraiser can help determine the true value. From this standpoint, equitable arrangements can be more easily arrived at among the disputing parties, and everyone walks away knowing they've received a fair deal.
Relocation
We understand the stress involved with an employee relocation, and take great care in establishing a convenient appointment time for the appraisal inspection. During our thorough inspection, we encourage relocating employees to provide input on the positive attributes of their property along with information about any recent sales or listings in their neighborhood that they want considered.
Home Improvements
Before you decide to sell your home, there are several decisions to be made. First is how much it should sell for. Don't forget that there may be other equally important questions to ask yourself, such as "Would it be better to paint the entire house before we sell it?", "Should I put in that third bathroom?", "Should I complete my kitchen remodel?"
Many things that we do to our houses have an effect on their value. Some may be significant, and others are not. While a kitchen remodel may improve the appeal of a home, it may not add nearly enough to the value to justify the expenses incurred.
Home Selling
Whether you choose to sell your home on your own or use the assistance of a real estate agent, a professional appraisal can help you make a better, educated decision when determining the selling price.
Unlike a real estate agent, appraisers have no vested interest in what amount the house sells for. They can easily step in and give you the information to help you decide since the appraiser fees are based on efforts to complete the report and not a percentage of the sales price. Thus, seeking a professional appraisal can often help homeowners make the best decisions about their homes, including setting a fair sales price on them.