Why Get an Appraisal?
There are several reasons why you may need or want to get
a home appraisal, including:
Pre-Sell/Purchase Decisions –
Before you decide to sell or purchase a home, you must
decide how much you should buy or sell it for. If you are
the seller, you may want to find out so you can decide
whether it is worth it or not to paint the house or put in
new carpeting. If you are the buyer, you may want to have
someone uninvolved with the transaction help you determine
if you are paying too much (or too little) for the house.
PMI Removal –
Private Mortgage Insurance (or PMI) is supplemental
insurance that many lenders ask homeowners to purchase when
the amount loaned on the property is more than 80% of the
value of the house. The Homeowners Protection Act of 1998
requires that lenders drop the PMI payments when the loan to
value ratio conditions have been met, however many require
an appraisal to support the homeowner's assertions of the
value increase. Getting an appraisal and dropping your PMI
payments can significantly reduce your monthly mortgage
Estate Planning –
The loss of a loved one is a difficult time, and often
this sad event is complicated by difficult decisions
regarding the disposition of the estate. Settling an estate
usually requires an appraisal opinion to establish fair
market value for the residential property involved.
Divorce Settlement –
Finalizing a divorce involves many decisions, including
property disposition. There are generally two options: the
house can either be sold and the proceeds divided, or one
party can buy the other party out. In either case, one or
both parties should have an appraisal of the residence.
Whatever your reason, chances are you will have to go
through a home appraisal at some point in your life.
Most lenders are required by federal and state laws and
current banking regulations to obtain an appraisal for most
loans secured by real estate and all appraisals made for
mortgage loans from federally insured lenders must be made
by a licensed or certified appraiser.