WHY YOU SHOULD GET AN APPRAISAL
Every day people in the United States buy, sell or refinance their home. Most of these transactions need an appraisal. It has become an important part of a real estate transaction. “Bring in the expert and making sure you are not spending too much on a property you are buying. Listed below are some of the main reasons.
- One of the most important issues involved in purchasing real estate is finding out what it’s worth. A professional appraisal report performed by a qualified, state-licensed or certified appraiser can provide you with an objective, third party opinion of a property’s current Market Value. For a small price this service will give you “peace of mind” that the property you are buying is worth a fair market price for the property.
- If you are refinancing you’ll need a new loan, which oftentimes requires a new appraisal of the property.
- Private 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 included in the monthly mortgage payment. PMI is no longer required if the remaining balance of the loan – whether through market appreciation or principal buy-down – dips below 80% of the value of the home. The United States Congress has required lenders to remove the PMI payments when the loan-to-value ratio conditions have been met. This was passed back in 1998, which is called the Homeowners Protection Act of 1998.
- If you believe your home meets the 80% loan-to-value metric some appraisers will offer a specific service. For a lower fee, the appraiser can provide you with a statement regarding the home value. The cost of this service is often recovered in just a few months of not paying the PMI.
- A divorce can be a traumatic experience for both parties and is often complicated by the difficult decision of “Who gets the house?”. In most divorce cases, the Court won’t usually force the parties involved to “buyout” the other party’s interest, but it may order the sale of the home so each party gets an equal share of the equity. Regardless of the situation, it’s a good idea to order an appraisal so both parties are fully aware of what the true market value is.
- Whether you choose to sell your home on your own or use the assistance of a real estate agent, a professional appraisal can help you make a better decision on determining your selling price.
- Unlike a real estate agent, an appraiser has no vested interest in what amount the house sells for. It’s easy for them to step in and give you the information to help you make your decision. Appraiser fees are based on completing the report and 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.