Every year, countless people in the United
States buy, sell or refinance their own slice of the American
Dream. Most, if not all, of these transactions include a
simple line item for an appraisal. It has become an understood
and accepted part of a real estate transaction. ''Let's bring
in the expert and make sure we're not spending too much on
this property.''
But is this the only reason to get an appraisal? Are there
other times when the services of a certified, licensed,
independent real estate professional might come in handy?
Property Tax Challenges
It's a running joke that every one has a
different perspective of what a house is worth. And it's the
tax assessor that seems to always come in at the high end of
the scale! Challenging the tax assessment has become an annual
ritual in many parts of the country. Unfortunately, most
people go into these challenges unarmed. They may pull some
information from the internet to support their claims, but
have no real basis other than: ''It wasn't worth that much
last year.''
A real estate appraiser can help in these
situations. While it may not be economical to commission a
full appraisals to lop a few hundred off your tax bill, often
an appraiser can do a limited appraisal or neighborhood
analysis for much less. These documents can carry a lot of
weight when you appear before an appeals board.
PMI Removal
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
folded into the monthly mortgage payment and is quickly
forgotten. This is unfortunate because PMI becomes unnecessary
when the remaining balance of the loan - whether through
market appreciation or principal paydown - dips below this 80%
level. In fact, the United States Congress passed a law in
1998 (the Homeowners Protection Act of 1998) that requires
lenders to remove the PMI payments when the loan-to-value
ratio conditions have been met.
Many appraisers offer a specific service for home owners that
believe they have met the 80% loan-to-value metric. For a
nominal fee, the appraiser can provide you with a statement
regarding the home value. Some will even take the next step
and help you file a challenge with your mortgage company. The
costs of these services are very often recovered in just a few
months of not paying the PMI.
Short Sale / Pre-Foreclosure:
To determine a value for bank
liquidation.
Pre-Sale Decisions
Before someone decides to sell a home,
there are several decisions to be made. First and foremost:
''How much should it sell for?'' But first there may be other
equally important questions to ask: ''Would it be better to
paint the entire house first?'' ''Should I put in that third
bathroom?'' ''Should I complete my kitchen remodel?'' Many
things which we do to our houses have an effect on their
value. Unfortunately, not all of them have an equal effect.
While a kitchen remodel may improve the appeal of a home, it
may not add nearly enough to the value to justify the expense.
Appraisers can step in and help make these decisions. Unlike a
Realtor, an appraiser has no vested interest in what amount
the house sells for. His fee is based on his efforts, 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.
Estate Planning, Liquidation or Divorce
The loss of a loved one is a difficult time
in life. Likewise, a divorce can be a particularly traumatic
experience. Sadly, these events are often complicated by
difficult decisions regarding the disposition of an estate.
Unlike many wealthy individuals, the majority of Americans do
not have dedicated estate planners or executors to handle
these issues. Also, in most cases, a home or other real
property makes up a disproportionate share of the total estate
value.
Here too, an appraiser can help. Often the first step in
fairly disposing of an estate is to understand its true value.
Where property is involved, the appraiser can help determine
the true value. At this point, equitable arrangements can more
easily be arrived at among disputing parties. Everyone walks
away knowing they've received a fair deal.
There are other uses for real estate appraisals. The
highly-trained individuals behind these services are always
looking for ways to put their expertise to work for home
owners and the people who support them. |
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