The Many Uses of Appraisals

Real Estate, along with many other markets uses appraisals. An appraisal is basically an opinion of the value of something. In terms of Real Estate, it is the value of a home, commercial building or property. The accuracy of the appraisal relies strictly on the quality of the appraisal as far as who is doing the appraisal, how thorough they are and what they had to go off of.

Below are many different appraisals needed for different circumstances.

1. Real Estate: This is the most common type of appraisal being done. A lender will not approve a loan unless an appraisal is completed. This helps insure the lender that the property being purchased meets that appraised value. In other words, the lender is making sure they are not getting a bad deal.

2. Specialty Appraisal: This is a type of appraisal that is done on specialty property. Specialty property includes property such as a golf course, gyms, and more. Being that it is a specialty field, they require a specialty appraisal to be done to make sure everything is in line.

3. Selling: When you are looking to sell a property, especially if it is a unique property circumstance, it is best to get a selling appraisal. This will help value the home for a buyer.

4. When you buy a property: Buyers want to know if they are getting a good deal or not. A buyer does not want to overpay for a property that is not worth as much as selling for. Typically, people get appraisals done when they are not too familiar with the area.

5. Buyouts: This is an appraisal done when a couple gets divorced. Often times, one partner will buy the other one out. In order to do this, an appraised value needs to be had on the home.

6. Rent Survey: These are surveys conducted on behalf of the landlord or the renter to get an idea of the renter market and what is an acceptable rent to charge or pay.

7. Removal of Private Mortgage Insurance: When a homeowner wants to remove Private Mortgage Insurance, or PMI, they have to get an appraisal to show their home has not decreased in value. More often than not, the home increase in value and put them at the 80% threshold sooner.

8. Condemnation: This is a process where property is assessed in order to compensate the owner of the property money for their property. This often happens when expansion is needed in the area and the home is on an area being expanded.

In all, appraisals are a very necessary part of our processes in Real Estate. Without them, we would not be able to get loans, refinance, do away with PMI or participate in a buyout from dissolution of marriage. Although there are many other ways appraisals can be utilized in Real Estate, these are the most common ways the appraisal can be used to expedite matters further.

Learn more about the Anchorage Alaska Real Estate market or search Anchorage MLS Listings on Ryan Tollefsen’s Alaska Real Estate web site.