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REASONS TO GET AN APPRAISAL Real estate appraisals have become an accepted procedure in the real estate industry. Due to the fact that every year countless Americans are engaged in buying, selling or refinancing their home, real estate appraisers have become crucial assets in real estate transactions. Aside from ensuring that one is not paying too much on a property, there are several other circumstances when the input of a licensed trained professional in this field are necessary. PURCHASING A HOME When purchasing a home, it is absolutely crucial to know what the property is worth in order to make an informed decision about whether to buy or not. A real estate appraiser is an independent, state-licensed professional whose opinion will objectively reflect the property’s current market value. A small one time investment of hiring a real estate appraiser can allow you to be rest assured that you are offering a fair price for the home. REFINANCING OR GETTING A HOME EQUITY LOAN Often a property appraisal is required when taking out a loan, consolidating bills or even tapping into the equity of your property. PRIVATE MORTGAGE INSURANCE (PMI) REMOVAL PMI is a type of insurance that is often requested by lenders that home buyers purchase when the value of the loan amount is greater than 80% than the home value. Typically, the payment for this type of insurance is included in the monthly mortgage payment and is easily forgotten. Unbeknownst to many, the PMI becomes unnecessary when the balance of the loan dips below the 80% level, regardless of whether this happens due to the market appreciating or the principal is paid down. To help protect this consumers, Congress implemented a law in 1998 (The Homeowners’ Protection Act of 1998), requiring that lenders remove PMI payments from mortgages when the conditions to do so have been met. Real estate appraisers enter the picture as many of them offer a specific service for home owners who they believe have met the 80% requirement. Specifically, the appraisers can provide a statement outlining what they believe the true market value of the home to be. In some circumstances the appraiser will file the statement with the mortgage company. By taking this step, often the initial costs of hiring the appraiser will be recovered in two to three months of not paying the PMI. DIVORCE SETTLEMENTS Divorces can be very traumatizing experiences for both parties involved, which have further potential to become complicated when facing the difficult decision of who will get the house. The court may require the home to be sold with the value of the sale divided equally between each party. It is not as common that the court will force one of the parties to buyout the other. In this difficult situation, it is mutually beneficial for both parties to have a real estate appraisal conducted so that they are both aware of what the true market value of the property is. This is important regardless of how the parties choose to proceed with parting from the home: should they choose to sell the home they will accurately be aware of its price and if they choose to buyout the other they will know that they have received a fair assessment. ESTATE LIQUIDATION Often following the loss of a loved one it is necessary to hire a real estate appraiser to determine the fair market value of the residential property involved. Discretion is essential with this matter and is enforced with the Uniform Standards of Professional Appraisal Practice (USPAP) ethics provision. An appraiser can help in this case by addressing the initial step of disposing of the property: determining the true value of the property. Once the value of the property is determined, equitable arrangements can be arrived at easier among disputing parties. All involved have the assurance that they have received a fair deal. RELOCATION There are often high levels of stress involved when employees are relocated. It is important to us to arrange an appointment time which is convenient for the homeowner to conduct the appraisal inspection. We encourage these relocating homeowners to provide as much input as they can with respect to the positive attributes of their property. We also encourage input with respect to any recent sales or property listings in their neighborhood that they would like considered in their appraisal. HOME IMPROVEMENTS TO ADD VALUE The most important question to ask when deciding to sell your home is of course, “how much should I sell it for?” There are often several other factors to consider before listing the home which can add to its value, such as painting, adding a room, re-doing the kitchen and so on. While it may initially seem like a good idea to remodel a kitchen to make the home more appealing to prospective buyers, the cost of doing so may not add enough value to the home to justify the expense. SELLING A HOME Regardless of whether you choose to sell your home on your own or with the assistance of a real estate agent, an appraisal by a professional appraiser can guide you into making an informed decision when setting your selling price. Because appraiser fees are based on the efforts involved to complete the appraisal and not on a percentage of the sales price, such as a real estate agent’s compensation, an appraiser has no interest in what the property sells for, thus providing you with an unbiased opinion. Therefore, the services of a professional real estate appraiser are essential in guiding buyers and sellers into making informed decisions in real estate transactions. |