Wynn Appraisals

What is Gross Living Area (GLA)?

Jacob Ostrowski — Wed, 14 Feb 2024 15:00:10 +0000

When navigating the real estate market, a comprehensive understanding of your home’s features and their impact on property value is key. One crucial concept to grasp, whether you’re a homebuyer, a homeowner, or a real estate professional, is Gross Living Area (GLA). So, what exactly is GLA and why does it matter so much in real estate? Let’s walk through this important concept and its influence on property transactions.

Definition of Gross Living Area (GLA)

In its essence, GLA refers to the livable space within a residence that is finished, heated, and above grade—unlike Total Living Area (TLA) which includes finished basements. GLA focuses strictly on the primary living quarters. Why is GLA so critical in property valuation? Simply put, when it comes to calculating market value, adjusting for square footage is a common benchmark with appraisers. Typically the larger the GLA, the more valuable the home.

Appraisers often use the ANSI Z765 standard to bring uniformity to GLA calculations, ensuring there’s a level playing field—think of it as having a rulebook that defines what counts as GLA and what doesn’t. After all, when it comes to mortgages, we’re playing with real stakes here, and consistency across our data is paramount.

So, what’s left out? Your finished basement typically doesn’t factor into GLA as it is below grade. Below grade refers to areas of a building that are partially or entirely below ground level. Since basements are not fully above ground, and often lack certain features typical of above grade spaces, such as adequate natural light, ventilation, and egress, they are not counted in the gross living area.

Excluding basements from the GLA calculation helps ensure consistency in comparisons between different properties. However, it’s worth noting that while basements are typically excluded from GLA calculations, they can still add value to a property. Finished basements, in particular, can provide additional usable space for recreational activities, storage, or even living quarters, which may be factored into the overall value of the home separately.

Importance for Homebuyers

For those looking to buy, knowing the GLA is crucial and telling. Keep in mind that appraiser-calculated GLA may differ from the one stated by the seller, so it’s always good to have an independent measurement done. If there’s any doubt, get the GLA verified during the home buying process. It’s a simple step that can prevent a headache down the road.

Importance for Homeowners

Understanding your property’s GLA can help you make informed decisions about selling your home, making renovations, or even when contesting property taxes. An accurate, independent measurement of GLA can streamline your future decision-making.

Importance for Real Estate Agents and Professionals

Selling a home is not just about showcasing its aesthetic and functional aspects; knowing the actual GLA of the property can prove to be beneficial. Real estate agents can capitalize on the appeal of a higher GLA when marketing properties. However, misreporting GLA isn’t just a minor mistake; it can have a ripple effect on property values and throw off the comparable data that appraisers depend on. So, measure twice and list once!

Conclusion

Now more than ever, with ever-evolving home buyer preferences and a competitive real estate market, having a clear understanding of GLA is essential. Whether you’re considering buying a new property, selling your existing home, or simply a real estate agent seeking to acquire accurate GLA data for a listing, trust Wynn Appraisals for precise GLA measurement services. With our expertise, every square foot will be accounted for—giving you the clear picture you need to move forward with confidence.

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Appraisals & PMI Removal

Todd Combs — Mon, 28 Aug 2023 21:46:36 +0000

What is PMI?

Private mortgage insurance, or PMI, is a type of insurance that protects the lender in case the borrower defaults on their loan. While PMI does not apply to all loans, it impacts a significant number of homeowners. Lenders will use the loan-to-value (LTV) ratio to determine if PMI is necessary. LTV is the ratio of your loan balance to the current value of the home. PMI can be paid as a one-time upfront charge at closing, a monthly premium, or both.

How do I avoid PMI?

The best way to avoid PMI is by using 20 percent of the home’s value as a down payment; however, that’s not always possible. Eligible veterans and active duty service members are able to avoid PMI with a VA loan. Another option would be to look for a non-conventional loan, no-PMI mortgage program, or lender-paid mortgage insurance. It’s important to note that this route may lead to higher interest rates but your mileage may vary.

How do I get rid of PMI?

Over the life of your mortgage loan, PMI will naturally end. Federal law requires PMI to be canceled when the LTV ratio is 78 percent or at the halfway point of the loan, whichever comes first. It’s important to note that the borrower can request PMI removal once they reach 80 percent LTV. Another option is to pay down your mortgage early or refinance. Refinancing your mortgage can play a major factor in getting rid of PMI early but timing is everything. It’s best to refinance when interest rates are low and after a substantial increase in housing prices. Not only will a lower interest rate help save money but taking advantage of substantial increases in housing prices lets you tap into “free” home equity. As the value of your home increases, the LTV ratio decreases, which can lead to a more favorable mortgage. While refinancing can be beneficial, some loans may require you to refinance into a new loan which may have additional costs and may not always result in a lower interest rate.

How do I refinance?

To begin the process of refinancing, reach out to your mortgage lender. The process may vary depending on the lender and loan type. To find the current value of your home, the lender will need an appraisal done. Most lenders will reach out to their approved network of appraisers but that’s not always the case. Some lenders will allow you to find your own appraiser but make sure you check with your lender first! When selecting a licensed appraiser, it’s best to use someone trustworthy that provides detailed and data-driven reports. The cheapest appraisal is not always the best option as low-quality reports can waste your time and money.

Not sure if you are ready for an appraisal? Click HERE to check out our article on how to best prepare!

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Disputing a Low Home Appraisal

Todd Combs — Tue, 06 Jun 2023 14:50:56 +0000

You have just spent months thinking about your dream home, touring too many houses, placing multiple offers, and finally your offer has been accepted. With no issues during the home inspection, you’re just waiting on the appraisal. Then you get that dreaded update that the appraisal is low and the difference is too much to pay out of pocket…. What do you do?

When stakes are this high, it’s important to stay calm and assess your options. Whether buying, refinancing, or any other mortgage loan, with a Reconsideration of Value (ROV) you have the opportunity to appeal the appraisal by providing additional comparable sales for the appraiser to consider. While an ROV is not a guaranteed fix, with these tips you will stand a better chance at disputing a low home appraisal.

Do you have a case?

Assessing whether you have a valid dispute is critical to saving your time and money. Begin by looking at the appraisal report in-depth, in particular the comparable sales. Were any renovations or updates taken into consideration? Are there any blatant errors? Were there any unexpected issues with the condition? Did comps sell over six months ago when recent sales are available? Is the subject’s market area stable? Are any comps significantly dissimilar? Does the appraiser discuss how they selected sales and made their adjustments? These are only a few of the potential questions you should be asking yourself when looking through the report.

Once you’ve seen what the appraiser did, it’s time to hop onto your preferred real estate website and look at similar homes in the area. Ask yourself – did the appraiser use the best available sales and do these sales support the loan you are requesting? While at first glance it may seem like some comparables are not the best available, it’s important to note that having unique or uncommon characteristics may require the appraiser to use less desirable sales. For example, if your home is on a slab foundation in an area where most homes have basements, the appraiser may be required to use a significantly smaller house or a low sale if better comps on slabs are not available.

Deciding if you have a case can be challenging especially for unique homes or market areas with few comparable sales. It may be best to navigate this process with an appraiser or real estate agent. If you think you have a case, the next step would be to reach out to your lender to begin the process.

How do I look for comparable sales?

When selecting comparable sales for the appraiser to consider, it’s essential that your comps are similar, sold within the past year, and sold on/before the day the appraiser inspected the home. Use the appraisal report as a guide for selecting comps as the appraiser will use similar adjustments if they decide to use the comps you selected. After adjustments, your comps need to support the loan amount.

	Subject (YOU)	Comp #1	Comp #2
Price	$165,000 (appraised)	$168,000	$190,000
Location/View	Residential	Residential	Residential
Design	Ranch	Ranch	Ranch
Age	61	59	60
Condition	Average	Updated	Average
Bed / Bath	3 Beds 1.1 Baths	3 Beds 1.1 Baths	3 Beds 1.1 Baths
Gross Living Area	1284 sq ft	1109 sq ft	1255 sq ft
Basement Finish	948 sq ft	555 sq ft with ½ bath	300 sq ft
Amenities	Stoop, patio, covered patio	Porch, patio	Stoop, patio, larger garage
Kitchen/Bath	Average	Updated	Updated

In this simplified example – are these good comparable sales? Do they support a higher appraised value than $165,000?

Both of these potential comps are superior and sold for more than the appraised value. However, since comp #2 sold for significantly more than the appraised value, after adjustments it will support a higher appraised value unlike comp #1.

Selecting comparables can be difficult. Every market and every appraisal report is different. Providing good comparable sales is essential as the appraiser is not required to use them.

I have good comps, now what?

If there have been any updates or renovations, it’s best to make a dated list with all improvements. While appraisers are typically good about noting any updating, things can get missed. The appraiser is typically only in your home for 15-30 minutes max and some updates may be difficult to identify upon visual inspection or hidden behind drywall.

With your comps and list of improvements, it’s time to get the information to the lender. If everything goes well, the appraiser will consider your comps and increase the appraised value.

My appraisal is still low, what can I do?

Unless you believe there is fraud or bias, this unfortunately may be the end of the road. Depending on your situation, you may be able to seek a new lender/financing or you can try getting your own appraisal done; however, the lender is under no obligation to consider it.

With so much uncertainty during the appraisal process, we at Wynn Appraisals want to help you. For only $150, we will look at your low appraisal and give our professional opinion. If we believe you have a good case to dispute the appraisal, we will also provide comparable sales - free of charge. With turnaround times of as little as 24 hours, reach out today to get started. Don’t let a low appraisal get in the way of your life!

Wynn Team

Frequently Asked Questions

Q: I told the appraiser I was getting a new roof next week but it’s not in the report?

A: If a new roof is not a condition of the appraisal, the appraiser is required to use what was present the day they inspected the property. You may be able to bring this up to your lender to get the appraisal marked “subject to” the installation of a new roof. In this scenario, the home is appraised as if the new roof is installed and the appraiser will have to return to the property to verify once it’s finished.

Q: Why did my house not appraise when there were multiple offers?

A: The appraisal process is complex and every report/market is different. Since appraisers deal in historical data, markets with high appreciation/depreciation can cause market values to outpace recent sales resulting in an appraisal gap. Additionally, seller concessions can sometimes widen the gap further.

Q: Why didn’t the appraiser use Becky’s house that sold 18 months ago? It sold for more than my appraisal.

A: Appraisers try to use the most recent sales to provide a more accurate valuation. Unless there is a lack of relevant sales, appraisers will try to use sales from the past year. If the market area is appreciating or depreciation, the high adjustments will make an old comp less relevant.

Have any questions? Let us know down below – we’d love to help!

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New Developments in St. Louis

Jacob Ostrowski — Tue, 23 May 2023 15:31:23 +0000

Demand is high for new construction homes in the St. Louis area. If you are currently in the market for a new construction home or thinking about it in the near future, here are a few new residential developments that are breaking ground or being proposed within the St. Louis region.

Harvest (O’Fallon)

Located off Highway N and Hopewell Rd in O’ Fallon, this ambitious new development boasts 896 new homesites across three villages and will offer onsite amenities.

Harvest will feature a 13+ acre town square and lawn area, food truck court, orchards/pumpkin patch, gardens, pickleball/bocce ball courts, playground trails, and a nature play area with a water feature. A truly unique experience when it comes to new construction developments.

McBride is the first of three builders to enter this development and has already begun to take contracts. Fischer & Frichtel and Consort Homes will not be joining the development until later this fall. The demand is high for this new development as it opened up on May 20th to prospective buyers camping out to claim their first pick of a home. If you wish to obtain a McBride home within this community, you should act soon to secure a lot.

The three villages consist of Harvest Manors, Harvest Estates, and Harvest Townhomes. Harvest Manors will consist of their bayside series of homes (ranch and two-story) and will start in the $220s. Harvest Estates will offer larger homesites and 6 varying floor plans which start in the $320s. Lastly, Harvest Townhomes are attached row homes, similar to McBride’s townhomes at Maryland Oaks in Maryland Heights, and will start in the $220s.

"You don’t see many new home communities with these types of amenities so there’s been a lot of interest in Harvest. With this location and the incredible value, we know the grand opening is going to be something special."

Jake Eilermann, McBride Homes President

For more information regarding the new Harvest Development in O’ Fallon, please visit McBride’s Website.

Majestic Pointe (Valley Park)

Valley Park will be adding a new development within its city limits. Majestic Pointe is a 44-homesite development spearheaded by McBride Homes. This new development will offer homes along the bluffs at Highway 141 near I-44 (across 141 from Cecil Whittaker’s Pizza).

This development is located in Valley Park/unincorporated St. Louis County but is within the Rockwood School District. This new neighborhood has easy access to 141 and 44, which would make for easier commutes. Also, it is a short drive to multiple retail centers including old Peerless Park, Gravois Bluffs, and Twin Oaks.

The bayside series of McBride homes will be featured here, with some having 3-car garages. The prices range from the $360s to $600s and have already begun selling (16 in the first month).

La Collina Terrace (The Hill)

In June, a new community is coming to The Hill in St. Louis City off Dagget Ave and Boardman St. This new community, La Collina Terrace, will feature 26 new townhomes.

This is a rare experience to have a brand new home within St. Louis’ old Italian neighborhood. Many famous local restaurants, bakeries, grocery stores, and entertainment venues are located within this neighborhood.

The ‘Florence’ floor plan has been created just for this project. This floorplan consists of three stories and includes 2 bedrooms, 1 bathroom, and a 1 car garage. These townhomes will feature brick fronts that mirror the rich history and architecture of the Hill. They will also feature rear entry garages along the back alley.

McBride will be open for information on June 1st and sales begin on June 17th.

Sutton Farms (Wentzville)

Located in the rapidly growing Wentzville off Peine Rd, this new Lombardo development offers their Nature, Traditions, and new Parkside series of custom-built homes. These custom homes feature many design styles ranging from Farmhouse, Neo-Eclectic, to Contemporary.

The new Parkside series will start from the $360s and range in size from 1,539 sq ft to 2,710 sq ft. Larger models are available in their Nature and Traditions series.

Lombardo has begun reserving first-choice homesites at this community on May 20th. If you wish to obtain more information regarding this community, please visit their Facebook page or website.

With a variety of new developments in the St. Louis area, it’s an exciting time for prospective homebuyers in the market for new construction. These developments are only a few of the many new construction developments in the area. If you’re in the market for a new home, act fast as demand for new construction is sky high in St. Louis.

Are you one of the lucky homebuyers that will soon call one of these developments home? Did we miss any new developments? Let us know below!

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2023 Reassessments Have Concluded. Did Your Taxes Increase?

Jacob Ostrowski — Mon, 08 May 2023 19:48:00 +0000

Required under state law, St. Louis County and City undergo property tax reassessment every odd year. If you are a homeowner that resides in St. Louis City or County, you may have received a letter stating your property tax has risen due to the subsequent increase in your property’s market value. If you believe the updated valuation is inaccurate, below is crucial information regarding the tax appeal process for St. Louis City and County, respectively.

"Based on recent sale prices, most homes in the City are worth up to ten percent more than they were since our last reassessment in 2021, and some are even higher. That means for most homeowners, if you were to sell your home today, it would be worth more than it was two years ago."

Michael Dauphin, St. Louis City Assessor

St. Louis and the surrounding regions have experienced an increase in values over the past few years. The County and City assessments are both reflecting the trends of the overall real estate market. Per the County Assessor, the median price for single-family homes was 192,000 in 2021, now that figure rests around $222,300, a shocking 16.9% increase. So while the new tax assessment may be alarming, most of these increases have merit. But if you do believe your property has been inaccurately valued, here are the options for appealing depending on if you reside in the City or County.

St. Louis City

The City assessor utilizes a mass appraisal system to value the real estate, which is then compared to recent comparable sales for accuracy. However, if there are any inaccuracies within the reassessment value, the City Assessor is committed to ensuring each parcel property reflects the fair market value and welcomes all appeals.

If you feel the City assessor has not accurately valued your property, you are able to informally appeal from May 1st through June 23rd. During this process, you should gather any evidence to support the change in the opinion of value (see below for a list of helpful evidence). The assessor will then review and consider the provided evidence. If you are not satisfied with the results of the informal appeal, you have the right to appeal to the Board of Equalization by July 10th.

St. Louis County

St. Louis County preliminary values are now available on their Real Estate Information page. Homeowners should search for their property within this database and verify that their property characteristics are correct. While the early review program has ended (April 1st-30th), you are still able to submit a formal appeal to the St. Louis County Board of Equalization. Appeals can be filed from May 1st through July 10th. For more information regarding the appeal process, please visit the board’s website.

Some helpful evidence to support your appeal may include:

A recent sales contract
An appraisal performed by a licensed real estate appraiser
Sales of comparable properties
Photographs of any defects
Estimate for repairs (detailing structural or condition issues including costs to repair)
Income and expense information (multi-family)

Important Note:

If you suspect the assessor has valued your property incorrectly and decide to appeal, you should first consult an attorney who specializes in tax appeal. They will be able to help guide and represent you throughout the process.

A comprehensive appraisal lays the groundwork for a strong appeal. If you and your attorney deem an appraisal necessary, Wynn Appraisals offers tax appeal appraisals that are extensive, backed by data, and reliable. A quality report you can rely on. Quick turnaround and hassle-free will always be the Wynn Guarantee!

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What to Expect During the Appraisal Process

Todd Combs — Fri, 05 May 2023 17:15:40 +0000

Whether you are buying, selling, or refinancing, appraisals impact all home mortgage loans. Lenders order appraisals to protect themselves and the borrower from overpaying. Today, we are discussing a step-by-step guide to the appraisal process, from ordering the appraisal to receiving the final report.

Before you order

Ensuring your house is well-maintained, as well as making necessary repairs, is critical for a smooth and efficient appraisal. Since the appraiser typically values your home as of the date of the inspection, any incomplete renovations, repairs, or deferred maintenance could impact the appraised value. An appraiser marking the report subject to completion or subject to repairs can have unintended consequences like delaying closing or requiring additional inspections. If you’d like to learn more about how to prepare for an appraisal, check out our blog post.

Ordering the appraisal

Once the appraisal is ordered, the mortgage lender works on finding a competent appraiser. The lender will either randomly assign the order to an appraiser on their approved panel or they will contract an appraisal management company (AMC) who will use their own panel. Some lenders use AMCs to further ensure the appraiser has no affiliation with either party. The appraiser will typically reach out within 24 hours of receiving the order. If an appraiser has been assigned and you haven’t heard from them within 48-72 hours, you may need to reach out to your lender for an update.

Scheduling the inspection

When scheduling the inspection with the appraiser, it is best to stay flexible. While every appraiser’s schedule is different, it is advantageous for everyone if the house is inspected as soon as possible to avoid any problems or delays. Some are willing to inspect on the weekend, and others are not. Your appraiser may vary. The inspection typically takes 30-45 minutes as the appraiser will need to take photos of every room, sketch the floor plan, measure the structures, and note any improvements or deferred maintenance. In order to take clear photos, the inspection must occur while there is still light outside. While this time constraint can create complications, it is important to note that you do not need to be present for the inspection. It’s not uncommon for appraisers to use the garage or a lockbox to gain access for inspection.

Inspection time

The inspection is your opportunity to provide any documents you believe may be helpful to the appraiser such as a dated list of recent improvements, plans and specs, plat map, major repairs, or comparable sales. While not required, this information could facilitate the appraisal process. If you decide to leave for the inspection, remember to set out any documents or keys needed for garages or outbuildings. If you decide to stay, make yourself available for questions but avoid being intrusive. It’s best to allow the appraiser room to work.

Now what?

A normal turnaround time for appraisal reports is typically between 1-2 weeks from when it was assigned. During this time, the appraiser will look for a minimum of three comparable sales, analyze market data, and write a report that explains and justifies their opinion of value. While they aren’t perfect, a competent appraisal can provide a good estimate of a home’s market value. Once the report is submitted, it is verified by the lender’s and/or AMC’s underwriters. If you are buying or selling and the appraised value meets or exceeds the contract value, you can look forward to closing day. When the appraised value is less, the buyer will have to pay the difference as the lender will only loan up to the appraised value. The deal may fall through if they are unable to pay.

Appraisal deficiencies

If there is an issue with the report, the borrower can ask for a Reconsideration of Value (ROV). A ROV gives you the opportunity to provide evidence of inadequate comparable selection, errors/omissions, or bias. It is important that ROVs are only used when there is strong evidence of inaccuracies within the report.

Do you still have questions about the appraisal process? Maybe we’ve answered them already! Click here to learn about five common appraisal misconceptions.

How have your experiences with appraisals been? Good? Bad? Let us know down below.

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How to Prepare for a Real Estate Appraisal

Todd Combs — Wed, 29 Mar 2023 01:12:43 +0000

A real estate appraisal is an essential step when selling or refinancing your home. While appraisers are required to be objective and impartial, preparing your property for the appraisal can help ensure the best possible outcome. Here are seven tips to maximize your home’s value and make the appraisal process smooth and efficient.

Focus on curb appeal: While the appraiser’s evaluation is solely based on objective criteria, ensuring your home’s exterior is well-maintained can create a positive first impression and demonstrate that the property is in good condition. A tidy lawn, trimmed bushes and trees, and clean siding contribute to the overall appeal of your property.
Make necessary repairs: Address minor issues, such as broken windows, stained carpet, or missing trim, before the appraisal. Fixing these small problems demonstrates that your home has been well-maintained and can contribute to a more accurate valuation.
Clean and declutter: Although personal items are not part of the appraisal, a clean and clutter-free home will allow the appraiser to focus on the property’s features. Additionally, the appraiser may need to take photos for the report so ensure that all rooms are clean and tidy.
Highlight recent upgrades: Provide the appraiser with a list of recent improvements and upgrades, including the dates and costs. This information helps the appraiser understand the recent improvements and may positively impact the appraisal.
Gather relevant documents: Compile any documents that can help the appraiser, such as floor plans, plat map, or records of any major repairs. This information assists the appraiser in understanding your property’s history and may be necessary to complete the appraisal report.
Know your neighborhood comparables: Familiarize yourself with recent sales of comparable properties in your neighborhood. This knowledge allows you to avoid any surprises and address any potential discrepancies in the appraiser’s report, ensuring a fair valuation of your home.
Be available and helpful: While not required, making yourself available during the appraisal process can be beneficial. You can answer any questions the appraiser may have and point out features that may not be immediately apparent. If you are present during the inspection, be sure to not be overly intrusive as this may make the appraiser uncomfortable and slow down the inspection.

By following these tips, you can set the stage for a smooth appraisal and potentially maximize your property’s value in the market. Keep in mind that appraisers are impartial professionals who must adhere to strict guidelines, but ensuring your home is in the best possible condition can contribute to a more accurate valuation.

Do you have any personal experiences or tips for preparing your home for an appraisal? Share your thoughts in the comments below!

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Appraisal Misconceptions

Jacob Ostrowski — Wed, 29 Mar 2023 01:12:34 +0000

Before you start the process, it’s important to understand the truth behind common misconceptions about real estate appraisals. There are many misconceptions about real estate appraisals that can lead to confusion and misunderstandings. In this post, we’ll debunk five common misconceptions about real estate appraisals and shed light on the truth behind them.

1.They are only for the buying/selling of real estate: Appraisals are used for mortgage financing, tax assessments, divorce settlements, estate planning, bankruptcy, insurance, and other reasons.

2.Home appraisals are the same as home inspections:A home inspection is a comprehensive examination of a home’s major systems and components, such as the electrical and plumbing systems, heating and cooling systems, foundation, and roof. The inspector is trained to identify any defects or safety issues that may affect the home’s habitability or pose a risk to the occupants. While an appraiser may take note of any obvious defects or safety hazards during their inspection, they do not perform the same level of examination as a home inspector. They are not concerned with the condition of the home’s systems or components, but rather with the overall value of the property.

3.The more money you put into your home, the more it will be worth: When an appraiser determines the value of a home, they consider many factors, including the home’s size, location, age, and condition. Upgrades and renovations are also considered, but the value they add to the home may not be equal to the amount spent on them. A homeowner should carefully consider the potential return on investment before making any major upgrades to their home.

4.Appraisals are expensive: While appraisals are not free, they are typically a small fraction of the overall cost of buying, refinancing, or updating a home. The cost of an appraisal can vary depending on the location and size of the property, but it is usually a few hundred dollars.

5.The appraised value is the same as the assessed value: The appraised value is determined by a professional appraiser, while the assessed value is determined by the local government for property tax purposes. The two values can be different as they use different methods and criteria to arrive at the value.

By dispelling these misconceptions, individuals can gain a better understanding of the role of appraisals in the real estate process. Knowing more about the appraisal process, individuals can approach it with confidence and make informed decisions about their real estate investments. Also, if we missed any misconceptions that you think should be considered, feel free to leave them in the comments below!

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Top 10 Reasons to Get an Appraisal

Todd Combs — Wed, 29 Mar 2023 00:55:51 +0000

Appraisals are an important part of the real estate process as they provide an objective valuation of a property which can be used to determine its market price, secure financing, settle legal disputes, and much more. Appraisers are licensed professionals who use a combination of property inspections, market data, and industry standards to arrive at an unbiased estimate of value. Today, we will explore the top 10 reasons to get a real estate appraisal.

Mortgage financing

The most common reason for an appraisal is to secure financing for a home mortgage loan or refinance your existing loan. Every mortgage loan requires an appraisal to assure the lender that they are not lending more than the property’s value. In the event of a default, the lender wants to protect themselves from losses; therefore, the appraisal is used to set the loan amount. Additionally, this ensures that the borrower is not overpaying. While appraisers are bound by code of ethics, appraisals for mortgage financing are typically ordered by the lender through an appraisal management company (AMC) to further ensure the appraisal is impartial and unbiased.

Thinking about moving

If you’re thinking about moving, selling your home is typically the biggest factor to consider. An appraiser can provide a detailed analysis of the local market, comparable sales, and an accurate estimate of your home’s worth. Correctly pricing your home is essential for a smooth transition as it will sit too long on the market if overpriced and money will be left on the table if underpriced. Good pre-listing advice can attract more interested buyers, potentially leading to a quicker sale.

Considering renovating

An appraisal can help property owners make informed decisions about which upgrades or renovations to make and which one to skip. Adding an inground pool could increase your property value but it may not be a good return on investment. Over-improving a house could be an issue as the value added may not equal the cost of the improvements. By getting an appraisal, property owners can ensure that they are making smart investments in their property.

Trouble selling

Has your house been on the market for a while with little to no offers? It may be time for an appraiser. By getting an appraisal, you can identify any potential issues impacting your marketability, such as necessary repairs or an unrealistic asking price. Additionally, with the recent uncertainty and swings in interest rates, some property values have drastically changed. It’s essential to have an objective assessment of your property’s value.

Probate/estate planning

When a property owner passes away, their assets are typically divided between their heirs or beneficiaries. When disputes arise over property value, an appraisal can help navigate this complex process by providing an unbiased estimate of value. Additionally, an appraisal can be used to help homeowners plan their estate by making informed decisions about one of their largest assets. For example, if a homeowner wants to leave their land to their children, an appraisal can help ensure there is a fair distribution of assets.

Divorce settlements

Divorce is never easy and it can become complicated when dividing assets like land. In many divorce proceedings, the property must be appraised to accurately determine and divide its value between both parties. This is especially important when parties disagree on value or if there are multiple properties. An appraisal can help resolve disputes and ensure that the property is divided fairly.

Property taxes

Property tax assessments are often based on the appraised value or a percentage of the appraised value of a property. Therefore, it is important that the homeowner verifies how their local municipality calculates assessed value. An appraisal can be used to challenge an incorrect property tax assessment or help the owner plan for a higher tax bill in the future.

Insurance coverage

Adequate insurance coverage is crucial in case of damage or loss to your home, but many property owners are unsure how much coverage they require. An appraisal can help determine the correct amount of coverage needed to protect the property in case of a disaster. It’s always a good idea to be prepared.

Becoming a landlord

With smart decision making and reliable valuations, becoming a landlord is a great way to generate passive income. Whether you intend to live in one unit or rent out the building, getting an appraisal provides an accurate assessment of the property’s value and market rental income which is essential in determining investment potential. In addition, an appraisal can identify any necessary repairs or upgrades that may need to be made before the property can be rented out.

Complying with legal requirements

Lastly, there are certain legal situations in which an appraisal may be required. The government may require an appraisal for eminent domain. Zoning changes may significantly impact a property’s value and highest and best use. A conservative easement (which permanently protects land from development) can drastically impact value and may qualify for tax benefits. These are only a few examples where an appraisal may be necessary to comply with legal requirements.

Whether you are buying, selling, refinancing, or simply trying to make informed decisions about your property, an appraisal can provide valuable insight into the value of your property. By working with our experienced appraisers, you can ensure that your valuation is accurate, objective, and thorough.

Do you have any experiences with appraisals? Let us know your thoughts in the comments below!

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