When do you need an Appraisal?

As a professional real estate appraiser, I bear witness to the countless slices of the American Dream that people acquire, trade, or refinance every year across the United States. A key component of these real estate transactions is often a seemingly straightforward line item for an appraisal. Indeed, most have come to accept the need for this expert input to avoid overspending on a property.

However, is an appraisal only necessary when buying, selling, or refinancing? Are there other situations where the services of an independent, certified, and licensed real estate appraiser might be invaluable?

Property Tax Challenges

It’s a universal truth that everyone has a unique perspective on a property’s worth. However, it often seems like tax assessors inevitably lean towards the higher end of the valuation scale! Many homeowners annually contest their tax assessments, but sadly, many do so without adequate preparation. They might refer to some internet sources to bolster their argument but lack substantial evidence beyond, “It wasn’t worth that much last year.”

In such cases, a professional real estate appraiser can be of immense help. While it might not be cost-effective to commission a full appraisal for a slight reduction in your tax bill, an appraiser can conduct a limited appraisal or neighborhood analysis for less. These documents can provide substantial leverage when you stand before an appeals board.

PMI Removal

Private Mortgage Insurance (PMI) is an additional insurance that lenders often require home buyers to purchase when the loan amount exceeds 80% of the home’s value. PMI often gets wrapped into the monthly mortgage payment and is quickly forgotten. However, PMI becomes redundant when the remaining loan balance falls below the 80% threshold due to market appreciation or principal paydown. In fact, the Homeowners Protection Act of 1998 mandates lenders to eliminate PMI payments when the loan-to-value ratio requirements are met.

Many appraisers, including myself, offer a specialized service for homeowners who believe they’ve reached the 80% loan-to-value milestone. For a nominal fee, we can provide you with a home value statement. Some appraisers even assist you in filing a challenge with your mortgage company. The cost of these services can often be recuperated in a few months of not paying the PMI.

Pre-Sale Decisions

Before deciding to sell a home, numerous questions need to be answered. Chief among these is: “What should be the selling price?” Other important considerations might include whether to paint the house, add a third bathroom, or complete a kitchen remodel. Such home improvements can affect the property’s value, but not always proportionally. For instance, while a kitchen remodel might enhance a home’s appeal, it may not increase its value enough to justify the expense.

Professional appraisers can provide guidance in these decisions. Unlike a realtor, an appraiser has no vested interest in the house’s selling price. Our fees are based on the effort put into the appraisal, not a percentage of the sales price. Thus, seeking an appraisal can help homeowners make sound investment decisions and set a fair selling price.

Estate Planning, Liquidation, or Divorce

The passing of a loved one or the process of divorce can be difficult and emotionally taxing. Such events are often further complicated by the need to make challenging decisions regarding the distribution of an estate. For most Americans without dedicated estate planners or executors, a home or other real property typically comprises a significant portion of the total estate value.

In such scenarios, appraisers can assist. The first step in fairly disposing of an estate often involves understanding its true value. If property is involved, an appraiser can help determine its true worth, enabling fairer arrangements among disputing parties. Everyone can walk away with the assurance that they’ve received a fair deal.

Easement/Right of Way

There are instances when property owners are informed by a government agency that a portion of their land is required for public purposes like new roads, easements, or utilities. Some states, such as California, don’t necessitate an appraisal to value your property but offer to pay for an appraiser for a second opinion. This is an incredibly beneficial service for property owners and real estate appraisal businesses like ours are equipped with the expertise to handle this.

The uses of real estate appraisals extend beyond these examples. As a highly trained real estate appraisal professional, I continually explore ways to use my expertise to benefit homeowners and their supporters.

While the appraisal is for the internal use of the lending institution. Federal law requires the borrower to receive a copy of the appraisal three days prior to closing of the loan.
Lenders and AMCs should be aware that copies of the appraisal have been used against the lending institution in frivolous and/or needless lawsuits.
If, for any reason, a lawsuit is instigated due to your granting of credit or a loan to a borrower, and Granite Appraisal Group becomes involved, any additional charges incurred by us will be billed to your company or institution and will become immediately due and payable.


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