There is a lot of value in knowing a properties value. It helps with the decision making process for financing, purchases, sales, settlements, and how a property is taxed. So, let’s go through some reasons for why someone should want or need an appraisal, as well as, some reasons why it may not make sense.
New Home Purchase
It is important, as a home buyer, to know if the purchase price is a good deal, bad deal, or a fair price, especially in markets with low inventory to choose from. Even if a buyer is paying cash for a home, they should strongly consider an appraisal for their own peace of mind.
New Mortgage or Refinance
Most all lenders will require an appraisal be done for refinancing or new home purchases. The appraisal in this case is usually ordered by the lender, paid for by the borrower/buyer, and more of a protection for the lender to make sure the home is worth what it is being purchased for and financed against.
Property Tax Appeals
Municipalities do allow property owners the ability to challenge the assessed value on their property if the property owner can properly justify that the value, and subsequent taxes based on that value, are too high. These annual or semi-annual Property Tax Tribunals are held by the municipalities, and they typically request a “fair-market” valuation on the property from a real estate professional as justification. An appraisal can certainly help with accomplishing this!
Estate or Divorce Settlement
Unfortunately, things happen in life that are not as pleasant as purchasing a new home. However, if there is real property involved, a professional appraisal can certainly work to get through those difficult situations. A real estate appraisal can be pivotal in the situations where there is a settlement of an estate or from a divorce. It provides a professional third-party assessment of quite possibly the largest asset that has to be handled in either scenario.
Insurance
Sometimes in the process of filing a claim or establishing a new policy, an appraisal is important to verify a stated value of a property by a third party. Appraisers have frequently been called into service for large scale destruction from natural disasters to aid insurance companies in handling large numbers of total loss claims.
General “What’s My House Worth?” Question
While an appraisal can answer that question, most property owners will find the cost to do an appraisal is too much to just satisfy their curiosity. An appraisal can vary in cost from $300-$750 depending on the size of the home and the level of detail required in the final report. In many cases, it is usually more advantageous to have a real estate broker or salesperson do a Comparative Market Analysis (CMA) to find out what a home might sell for on the open market. Many agents will do this free of charge just for the opportunity to do a listing presentation.
If you have determined an appraisal might be right for you, click on the Contact section and give us a call or email today.