Why an Appraisal?


Every  year, countless people in the United States buy, sell or refinance  their own slice of the American Dream.  Most, if not all, of these  transactions include a simple line item for an appraisal.  It has become  an understood and accepted part of a real estate transaction.  "Let's  bring in the expert and make sure we're not spending too much on this  property."

But is this the only reason to get an appraisal? Are there other  times when the services of a certified, licensed, independent real  estate professional might come in handy?  You bet.

One of the most important  issues involved in purchasing a property is developing an opinion of  what it's worth so that you can make an informed offer to purchase.  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.  And for the small price of this  service, you can give yourself "peace of mind" prior to making an offer  to purchase that you're offering a fair price for the property.  

If you need  to consolidate bills, have a 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 the property.

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. Very 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 home owners that believe  they have met 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 the next step and help you file a challenge with  your mortgage company. The costs of these services are very often  recovered in just a few months of not paying the PMI.

A divorce can be a  particularly traumatic experience for both parties and is often further  complicated by the difficult decision of "Who gets the house?".  In most  divorce cases, the Court won't usually force the parties involved to  "buyout" the other party's interest but it may however 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 order an appraisal so both parties  are fully aware of what the true market value is.

If the parties want to sell the home, they'll have a better idea of  what price to set.  And on the flipside, if a "buyout" is the chosen  option, both parties will feel like they've gotten a fair assessment.

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 these issues.   Also, in most cases, a home or other real property makes up a  disproportionate share of the total estate value.

Here too, an appraiser can help.  Often the first step in fairly  disposing of an estate is to understand its true value.  Where property  is involved, the appraiser can help determine the true value.  At this  point, equitable arrangements can more easily be arrived at among  disputing parties. Everyone walks away knowing they've received a fair  deal.

We understand the stress involved with  an employee relocation.  We 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.

Before you decide  to sell your home, there are several decisions to be made. First and  foremost: "How much should it sell for?"  But don't forget 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 which we do to our houses have an effect on their value.   Unfortunately, not all of them have an equal effect. While a kitchen  remodel may improve the appeal of a home, it may not add nearly enough  to the value to justify the expense.

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 your selling price.

Unlike a real estate agent, an appraiser has no vested interest in  what amount the house sells for.  It's easy for them to step in and give  you the information to help you make your decision.  Appraiser fees are  based on efforts to complete the report and not a percentage of the  sales price. So seeking a professional appraisal can often help  homeowners make the best decisions on investing in their homes and  setting a fair sales price.