Why Are Appraisals Done?

To Appeal High Property Taxes:

The assessed property value of you home directly affects what you pay in taxes on a yearly basis. If you are not sure what your assessed value is then an appraisal can be completed to ensure your are paying the correct property taxes on your home. In certain parts of the country this practice is common, this is just one avenue that can be taken to assist you in reducing your real estate taxes. By ordering this appraisal you can potentially save thousands of dollars per year.

To Eliminate PMI:

Appraisals obtained for establishing the LTV or Loan to Value ration can help you reduce your monthly payment. PMI or Private Mortgage Insurance is protection for the lender in the event you default on your loan and your LTV ration is above 80%. If you feel your LTV value is lower than 80% you can request that PMI be removed from the monthly payment. By law the lenders must notify their client when their LTV ratios are lower than 78%.

To Define a Home's Market Value:

Very few individuals order appraisal reports to establish an offering price or to substantiate a purchase price. At the point that an offer to purchase is made, the price has been set by other parties, not the purchaser. The price has been determined by the seller, who wishes to obtain the highest price possible. The real estate agent will typically perform a comparative market analysis (CMA). The appraisal laws in most states allow real estate agents to perform CMAs without an appraiser's license or certification. A CMA is a necessary part of the agent's preparation for a listing and consists of examining sales of properties in the area to arrive at a listing price. The reliability of the CMA depends upon the agent's experience and the characteristics of the property. The agent will suggest a selling price to the seller based upon the analysis. However, neither the seller nor the agent are bound by the results of the analysis, and the agent is not required to follow any formal procedure in completing the CMA.