do you need an Appraisal:
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.''
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?
a running joke that every one has a different perspective
of what a house is worth. And it's the tax assessor that seems
to always come in at the high end of the scale! Challenging
the tax assessment has become an annual ritual in many parts
of the country. Unfortunately, most people go into these challenges
unarmed. They may pull some information from the internet
to support their claims, but have no real basis other than:
''It wasn't worth that much last year.''
real estate appraiser can help in these situations. While
it may not be economical to commission a full appraisals to
lop a few hundred off your tax bill, often an appraiser can
do a limited appraisal or neighborhood analysis for much less.
These documents can carry a lot of weight when you appear
before an appeals board.
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.
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.
someone decides to sell a home, there are several decisions
to be made. First and foremost: ''How much should it sell
for?'' But first there may be other equally important questions
to ask: ''Would it be better to paint the entire house first?''
''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.
can step in and help make these decisions. Unlike a Realtor,
an appraiser has no vested interest in what amount the house
sells for. His fee is based on his efforts, 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.
Planning, Liquidation or Divorce
loss of a loved one is a difficult time in life. Likewise,
a divorce can be a particularly traumatic experience. Sadly,
these events are often complicated by difficult decisions
regarding the disposition of an estate. 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.
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.
are other uses for real estate appraisals. The highly-trained
individuals behind these services are always looking for ways
to put their expertise to work for home owners and the people
who support them.