Why is an appraisal required?
An appraisal is an estimate of the value of a property. An estimate of the value of the property generally refers to its fair market value. Most lenders will not lend money without an acceptable appraisal. You can be sure you are getting an expert appraisal when the appraiser is licensed or certified and is governed by the Competency Provision of the Code of Ethics of the Uniform Standards of Professional Appraisal Practice (USPAP), proclaimed by the Appraisal Foundation.

Reasons for an Appraisal
Appraisals are normally ordered when you are obtaining a loan on a property. However, there are many other reasons why you might want an appraisal.
 To dispute your property taxes
 To establish the replacement cost for insurance purposes
 To settle a divorce
 To settle an estate
 To buy out a partner
 To help negotiate a purchase price either as a buyer or as a seller
 To satisfy the IRS
 To settle a lawsuit
 To protect your rights in a condemnation case

Who owns the appraisal?
In almost every case your mortgage company owns the appraisal, even though you may have paid for it. This is because your mortgage company orders the appraisal on your behalf, and the appraiser lists that mortgage company on the appraisal report. Even though the Mortgage Company owns the appraisal, you have the right to receive a copy. It is at the Mortgage Company's discretion whether to give you the original appraisal.

How much does an appraisal cost?
The cost of an appraisal varies based upon the following factors:
 Type of appraisal: The most commonly used appraisal is called the Uniform Residential Appraisal Report (URAR). Some lenders may accept an abbreviated appraisal called the "Drive By Appraisal", which costs less than the URAR.
 Type of property: Appraisals for single-family homes and condominiums usually cost less than appraisals for multi-unit properties.
 Value of property: Appraisals for higher-priced homes usually cost more than appraisals for lower-priced homes. If your home value is over $500,000, you can expect to pay more for your appraisal.
 Location of property: geographic location and availability of appraisers affect the cost of an appraisal. In areas where appraisers are few, or the properties are hard to access, appraisal costs increase.
 Use of property: Appraisals for income-producing properties, for example, usually cost more than appraisals for non-income-producing properties. Rental property appraisals include a rent survey and the property's income statement. Appraisal fees on single-family, owner-occupied homes under $500,000 in densely populated areas vary between $250 and $400. Fees for similarly priced rental properties may vary between $400 and $550.



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M&M Resources Unlimited, Inc.
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