3 Professionals That Will Need A Home Appraisal Performed

Are you in a situation where you need a home appraisal and are not sure what it means? If so, you're likely wondering what purpose an appraisal serves and why it is necessary. Here is what you need to know about who would require a home appraisal and why.

Lenders Use Appraisals To Determine Maximum Loan Value

One of the reasons that a mortgage lender requests an appraisal is so that they are not approving a mortgage for a home that is worth less than the mortgage value. That is due to the home technically belonging to the lender until the home has been paid off in full, and they do not want to be stuck with a foreclosed home that they've paid more for than what the home is worth. 

For example, if you buy a home for $250,000 and it is appraised at $200,000, the bank could lose money if you foreclose on the home within the first few years. When the bank goes to sell the foreclosed home they will certainly take a loss. In this instance, the bank would only offer you a loan that is up to $200,000 for the home. You can pay more than that for the home, but you'll need to make up the difference with a large down payment.

Counties Use Appraisals To Determine Your Property Taxes

Your local county is going to use appraisal values in order to determine how much you pay in property taxes. That is because the sales price of a home is not always accurate to a home's value, and property value changes all the time. You could be in a home for 30 years and the sales price would be very outdated and an incorrect way to evaluate the price of a home. That is why an appraisal may be done to determine how much your home is actually worth.

Probate Lawyers Use Appraisals To Determine A Home's Value

If you are trying to divide up an estate, it is common for many items to be appraised to determine what their values are. This is due to many debts of the estate needing to be paid off, and it's possible that selling the home will be required to generate the money to do so. An appraisal lets the probate lawyer and executor know the value of the home and make a decision about if the home needs to be sold to pay those debts.

To learn more, reach out to a real estate appraisal service.