There are many reasons why you may need the services of a real estate appraiser when you own a home. Appraisers are used when you’re buying, selling, refinancing, and any time you may need to know the value of your property.
Here, we’re taking a look at what a real estate appraiser is and when you may need one.
What is a Real Estate Appraiser?
Appraisers provide the value of properties based on a number of things. Appraisers can specialize in different types of properties, including residential, commercial, or agricultural.
An appraisal involves detailed research into specific market areas. Appraisers will use their experience, knowledge, and professional judgment to form an opinion on the value of the property. And, appraisers must always remain objective and provide unbiased opinions about the value of a property.
Reasons to Hire a Home Appraiser
Buying a home with lender financing
The most common reason to hire a home appraiser is when a buyer purchases a home from a seller with mortgage financing. This is because the lender granting the loan will want to make sure the property they are lending on has an appropriate value. The home’s value will need to be approved by the lender before a mortgage is granted.
Buying or selling without financing
Appraisers are often asked to provide an opinion of value for either the home buyer or the home seller. This is to get an accurate market value without being influenced in any way.
Refinancing an existing loan
When you refinance your mortgage into a new loan, the lending institution usually requires an appraisal. They do this for the same reason as a home purchase. Refinancing is typically done to reduce the loan term or get a better interest rate.
Removing private mortgage insurance
When you buy a house with less than a 20% down payment, you will often pay what’s referred to as private mortgage insurance (PMI). This protects the lender if the borrower defaults on the loan and foreclosure needs to be instituted.
PMI can be an expensive fee that most borrowers don’t want to pay. Once you have 20% equity, you can ask the bank to remove the PMI. Sometimes homeowners want to be certain that they have reached the 20% threshold and ask an appraiser to conduct an appraisal.
Settling an estate
Providing appraisals to help settle estates is not an uncommon task for real estate appraisers. Not only is an appraisal required for the deceased’s final tax return, but it is also used to help divide the home’s equity among family members.
How Much Does a Real Estate Appraisal Cost?
A few factors can determine the cost of an appraisal. Typically, appraisals can cost between $300 and $500. However, a commercial appraisal can have a much different price range. Commercial appraisals can be anywhere from $2,000 to $10,000.
Ready to get started?
Enlist the help of a real estate agent to guide you through the process and make sure that you are in the best position possible.
Team Melton has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started on selling your home!