Reasons For Getting A Home Appraisal
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Most people think that the only reason to get a home appraisal is because they are refinancing or financing a purchase of a home. There are actually a host of other reasons too. An appraiser is always a valuable third party correspondent in many other circumstances.
Here are some examples where an appraisal may come in handy:
Selling or Buying(Without Financing):
This is one of the most common requests. Get an unbiased opinion of value from a certified appraiser who values homes for a living and does not have an interest in your home appraising too high or too low. Realtors do not value homes for a living and thus a bank would not accept an appraisal from a Realtor. Realtors might might be bias when giving you the value of a home. They might tell you what you want to hear so they can get your listing or make you put an offer on a home.
Divorce
This is also a very common request. A certified appraiser is impartial and gives you the value of your home based on the facts so the division of your assets can be done as fair as possible.
Estate Settlement(Probate)
An appraisal for this purpose is usually required for the deceased’s final tax return. It is also helpful to divide the home’s value between family members. Many times this appraisal is done as of the date of death which can be a few years in the past. Other times it is done as of the current market value. It is best to consult with your lawyer or accountant.
Bankruptcy
This has been a common reason lately. When filing for bankruptcy the court needs to see the value of your assets. A certified appraisal accomplishes this.
Loan Modification
This has also been a common reason lately. The bank will need a certified appraisal to work out the details of your loan modification.
PMI Removal
To remove your PMI you will need an appraisal showing that you have at least 20% equity in your home.
Tax Reassessment
Several states base the amount paid in property taxes on the market value of a home. If the home value has decreased then a reappraisal showcasing lower figures may decrease your property taxes.
Refinancing
If you want to refinance your home, a valuation must be done. It’s important to ensure that the value offered by the property justifies the refinanced loan amount.
Cash or Business Loans
If you are seeking other loans for which your home will be your main means of collateral, then a current appraisal of the home will be made. That appraisal report then becomes an important part of the loan process.
Buying a Home(With financing)
While this is similar to selling a home, your lender will want to know if the cost of the home matches the loan you have requested. The lender wants to make sure the property is worth the amount of money that will be loaned. Further, a third party professional will verify whether or not the asking price is set at a comparably fair local market value.
Categorised in: Reasons To Get An Appraisal
This post was written by Joseph Castaneda
3 Comments
Thanks for pointing out that you’ll need a home appraisal if you file for bankruptcy. My brother has his some hard times lately and is thinking about filing for bankruptcy. I’ll definitely give him a call and let him know he’ll need to get a home appraisal.
I didn’t know that getting your home appraised could help with a loan modification. My husband and I are wanting to buy a home and are needing to get ours appraised. I’ll have to do some research and find the best company in my area to do this for us.
Thanks for helping me learn about the different functions of residential property appraisal. I never knew that it has many uses. Apparently, my sister is planning to purchase a home she found in a listing. However, she isn’t sure whether the house is what she really needs, which is why she needs to hire a certified appraiser to identify its value.