While there are numerous reasons why you would want to get a residential real estate appraisal, the most common is often in connection to the purchase or sale of a property. The bank or lending institution requires one as a basis of underwriting the loan to be made on the property, often to ensure that they are not lending an inappropriate amount for the real estate in the transaction. Banks and Lenders will always only use Certified Real Estate Appraisers, and so should you!
When you are obtaining insurance on your property, you will also want to get a residential real estate appraisal to establish the value or “substitute cost” for insurance purposes. An Appraisal used for establishing the proper insurance coverage is limited to the reproduction cost of the improvements and an estimate of the replacement cost. This type of property appraisal used to establish the insurable value is typically not the same as the market value, since it doesn’t include the land’s value- which can be a sizable portion of the market value. Another reason to get an Arizona Residential Real Estate Appraisal for Insurance purposes is to file an appeal against the annual appreciation increases insurance companies use, especially if the increase in value determined by the insurer results in an unfair premium increase.
Another often overlooked reason is to settle an estate. Residential real estate appraisals establish the value of property when a death occurs and the real estate is going through the process of probate. The survivors of the deceased who owns property in Arizona will want the value estimate which determines their tax liabilities. Estate appraisals are typically obtained through the attorneys for the estate and not generally by the survivors, although if you are left with this task, it is best to use a only Certified Appraisers that are recommended by lawyers, real estate professionals, lending officers and banks as they are often the most trusted real estate appraisers.
Here are some others:
- To get a compensation for a property condemnation
- To appeal high property tax assessments
- When you are going through a Divorce
- To establish value during a Bankruptcy
The Appraisal Standards Board (ASB) sets the rules for performing an appraisal and reporting its results. It promotes the use, understanding and enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP). Federal law requires that real estate appraisals used with federally-related transactions be performed in accordance with USPAP, which contains the recognized standards of practice for real estate, personal property and business appraisal. Since 1992, the Office of Management and Budget (OMB) has required federal land acquisition and direct lending agencies to use appraisals in conformance with USPAP.