You probably get solicitations in the mail from Realtors all the time, offering you a “free Market Analysis of your home”. The Realtor is offering to tell you the current market price if you were to sell now – and they hope you will be impressed by their knowledge and list your house with them! If you are looking for a realtor, or just need to have your expectations regarding the market value of your home confirmed for your personal planning, this is a very good way to judge the value of your home in the current market.
A market analysis is not an appraisal. Certified appraisers are not looking to sell your home, but to objectively verify its true value. According to The Appraisal Foundation “An appraisal is an independent, unbiased estimate of value that often serves as a cornerstone in a transaction. Professional appraisers value property with independence and objectivity”
When do you need an appraisal?
When you apply for a mortgage, refinance, or obtain a home equity loan, the lender will be required to obtain an appraiser certifying the value of the home. You might need an appraiser if you are appealing your property taxes, or your town will contract with an appraisal firm to do the evaluation of property. Real estate fund managers rely on appraisals to determine core value. If you are resolving an inheritance dispute or a divorce, you will want a verifiable unbiased valuation of property involved.
Appraisers value real estate with three separate approaches: Comparisons to recent sales, estimates of value compared to the income an investment property will produce, or an estimate of the cost to replace or reproduce the subject property. The comparison approach is most commonly used in the valuation of most residential homes.
In choosing an appraiser for real property, you want someone who is licensed in your state, has an excellent reputation, and preferably is seeking continuing education with a professional group adhering to ethical standards. You can find appraisers who are accredited by the American Society of Appraisers by visiting their website.
The Appraisal Foundation has an excellent guideline for consumers on finding and choosing an appraiser. You will find the answer to many of your questions about qualifications, ethics, expectations on their website.