When Would You Need a Home Appraisal?
Knowing when to get your home appraised can be confusing, especially if it's your first time. Real estate agents and mortgage lenders start using new lingo and asking questions you might not know how to answer yet. So, it's perfectly reasonable for confusion to arise.
Homeowners and buyers stepping into the property appraisal process often ask questions like, "When do lenders require an appraisal?" or "How long does a home appraisal take?"
Here, we'll discuss the reasons and instances when a home appraisal might be needed and answer questions about cost, timeline, and requirements.
When should you get a home appraisal?
The primary purpose of a home appraisal is to establish the home's fair market value. They are required when selling, buying, or refinancing a property.
However, home appraisals are also valuable for many situations because they provide a reliable, up-to-date valuation of a property critical for financial, legal, and personal decision-making processes.
These include the following:
Pre-listing
A pre-listing appraisal gives the seller an independent valuation before listing a property for sale. This can help set a realistic price, avoid overpricing or underpricing, and facilitate a smoother sale process.
Settling an estate
An appraisal is often required to determine the value of a property as part of the estate assets. It's essential to appropriately divide assets among heirs or sell the property to settle any debts the estate may have.
Divorce settlement
During a divorce settlement, a home appraisal ensures that the property's value is accurately assessed, facilitating a fair division of assets between the parties involved.
PMI removal
For homeowners looking to remove Private Mortgage Insurance (PMI), an appraisal can demonstrate that the home's value has increased or the mortgage balance has decreased to meet the requirements set by lenders, eliminating the need for PMI.
Refinancing
When refinancing, lenders require an appraisal to confirm the property's current value and ensure the loan-to-value ratio meets their criteria for the new loan terms.
HELOC
A Home Equity Line of Credit (HELOC) also utilizes an appraisal to determine the amount of credit a homeowner can access. The available credit is based on the difference between the home's current market value and the outstanding mortgage balance.
Challenging a tax assessment
If a homeowner believes their property's assessed value is inaccurately high, leading to higher taxes, an appraisal can provide the evidence needed to argue for a lower valuation.
Probate
In probate situations, where a property is being transferred according to a will or intestacy laws, a date of death appraisal establishes the property's value at the time of the owner's death. It will help determine inheritance taxes and the equitable distribution of the estate.
Estate planning
Estate planning often involves appraisals to ensure a realistic valuation of one's assets. This valuation aids in creating a will or trust that accurately reflects the estate's value for future beneficiaries.
Appreeze: Streamlined appraisals for every situation
If you need your house appraised, Appreze provides fast, efficient appraisal services right on your smartphone. You'll get a GPS-verified virtual appraisal and a high-quality report, all at a fixed rate. Get started today!
Should I get my home appraised after renovation?
Getting your home reappraised after a significant renovation is typically a good idea. If your house has recently undergone major work that costs more than $500, an up-to-date appraisal value will allow you to update your home's insurance and protect your investments.
Some large renovations aren't as cost-efficient as you might think. You might even lose money if you have to pay more for the home improvement than the value it adds to your appraisal.
Identifying which kinds of home improvements and renovations will impact a home's value is important. For example, adding a luxury feature, like a pool, seems like a great idea for your own entertainment, but it doesn't guarantee a higher appraisal value. Unnecessary or over-the-top renovations don't always help an appraisal.
Renovations that increase appraised value:
- Kitchen remodels
- Bathroom remodels/additions
- Roof replacement
- Deck installation
- Attic-to-bedroom conversion
- Basement-to-bedroom conversion
- New paint
- New flooring
- Updated landscaping
Renovations that add little value to a home:
- Converting a bedroom for another use (large closet, wine cellar, man cave, etc.)
- Adding high-end fixtures and appliances
- Crown moldings
- Pool installation
- Extensive landscaping
- Decorative lighting
- Installing carpet over the hardwood
- Things an appraiser can't see
Let Appreeze provide you with a fast, easy appraisal value!
Whether you've recently had a home renovation or are planning to refinance your home, Appreeze can alleviate the stress of a home appraisal process. You can have your appraisal completed directly on your phone and receive the results in as little as two weeks. Order your appraisal from Appreeze today.
