When I became an appraiser I had no idea that my profession would be of such interest to total strangers. The minute someone finds out what I do for a living, the next question is either “What is my house worth?”, “Where should I buy?”, and most recently “Are we at the bottom yet?” The one question I am rarely asked is “Why should I get an appraisal?” Appraisals are becoming multi-purpose real estate tools. In the past, appraisals were viewed as just another step in the purchase process.  Now appraisals serve as guides to help borrowers:

• Know if a refinance is possible,
• What price to realistically list a property at,
• How long it is taking similar properties to sell and at what price they sold for,
• Determine market rental rate for an investment property.

Anyone can order an appraisal – not just a bank!!  The appraisals completed for an individual contain essentially the same data as an appraisal for a lending institution and are given directly to that individual. Homeowners and potential buyers both should consider ordering an appraisal… why?

• To avoid paying too much for a property,
• To find out what their property’s competition sold for,
• Avoid “under-pricing” their property in order to maximize potential profit,
• Aggressively price property or negotiate a lower sales price based on prior sales.

Too often I hear “You won’t find a similar property listed for less!!” The problem with this phrase is that a property can be listed for any price – list price does not determine market value. There are some fantastic Realtors in our area that work extremely hard for their clients. However, buyers should not rely solely on an agent to research and organize data to the extent that an appraiser will, as it is not their profession.  In many cases, agents will contact an appraiser prior to listing a property to ensure they are pricing the subject realistically. It is important to note that appraisers are unbiased third party individuals and therefore do not have a vested interest in the outcome of the transaction (be it a purchase or refinance). Appraisers do not create value; rather we report the data from the current market.

Ultimately, an appraisal can serve as an invaluable tool in order to avoid financial ruin. Appraisals can help investors know the potential profit of that duplex they are looking to purchase,  help the first time homebuyer avoid paying too much for their first home, and can help the savvy condo buyer get a fair price along with that perfect gulf view.

Appraisals are not just for purchases/refinances – I have been asked to do appraisals for:

• Employee Relocations
• PMI (private mortgage insurance)
• Estate planning
• Divorce settlement
• Tax abatement

I truly think that the housing market will begin to strengthen again – however the speed at which it does and the solidity of the foundation will be a direct result today’s buyers.  These buyers will need to do their homework, know exactly what they are purchasing and what the current market value is – not the anticipated value. Please, who ever your appraiser is, ask questions.  If you feel something was missed – ask your appraiser. If you don’t understand how to read an appraisal, let your appraiser know.  It is our job to build public trust in our profession – which will be a daunting feat based on the downward spiral the real estate market has taken.  The information and data contained within appraisal reports could prove to be invaluable to both the real estate novice as well as the seasoned investor.

I am a Certified Real Property Appraiser working predominately in Bay County with some projects extending west towards Destin and east of the Mexico Beach area. Prior to becoming an appraiser I worked as a mortgage loan underwriter – which has provided me with a unique understanding of both sides of mortgage loan transactions. – Jake