Why Get an Appraisal?

Real estate, whether it's a home or commercial property, is likely the most important – and most expensive – purchase a person or company will make. Buyers want to be sure they are paying fair market value. Since an appraiser has no stake in the sale or purchase of the real estate, he or she can provide an objective opinion as to value.

An appraisal by a qualified, state-licensed appraiser can help a buyer of real estate make an informed decision with regard to offer price. In fact, banks and mortgage companies require an appraisal to protect their own interests and ensure that they are not lending more money than the property is worth. They also perform an appraisal when borrowers apply for refinancing or home equity loans.

Most people associate appraisals with home purchases, but appraisals are helpful to both individuals and companies in several other situations, including:

Appealing taxes
Determining whether a borrower who is paying Private Mortgage Insurance (PMI) has met the loan-to-value ratio required to qualify for elimination of the PMI from his mortgage payment
Determining house value in divorce settlements settled either by buyout or sale of the home
Estimating gift and inheritance tax
Liquidating an estate equitably
Estimating property damage
Getting an unbiased opinion as to asking price when selling a home
Determining whether remodeling or making home improvements is worthwhile
Setting rent schedules
Determining market value of a relocating employee's home so the employer can help in the transition by purchasing it and selling it later

The cost of an appraisal often pays for itself in the peace of mind achieved by knowing the fair value of the property or the savings achieved in a tax appeal or elimination of PMI.

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