Face it, while the majority of us like to pretend we know something about everything, it is difficult to stay abreast of personal finance let alone industries. So it is with real estate. Having been in the insurance industry for years and years I can assure you that things change…dramatically. Certain laws that were in place when I started were gone when I left. It is not surprising a society that tends to accept a single opinion with regard to their health will also do so with regard to a piece of property. So what are some reasons to get multiple appraisals on property?
First, you can compare the appraisals. In fact I would get three of them to have a “tie-breaker” and a good average. This gets one back “in the loop” so to speak, “up to speed”.
If you are selling a property it gives you a floor that you don’t want to drop below. For example, if the house is worth $85,000 by appraisal, then it may make sense to put it on the market at $90,000 but you also know just how low you can go with respect to negotiations.
Conversely, if you’re buying property, you know what the selling price with respect to worth will be and avoid spending too much.
Today there is a trend for senior citizens to essentially liquidate their own estate by what is called a reverse mortgage. This involves getting a chunk of money for your home to increase and extend income. Since this figure is based on property value and, since the amount is just a portion of that, it is imperative you have a proper value.
It goes without saying you should have the property insured both with homeowners and life insurance. It is an asset most of is cannot afford to lose.
When looking at property you own, it is important to know what the value is as far as estate impact should you die. It is important to know if, due to inflation the value has been put over a certain limit that might increase taxes to your estate.
Most cities charge property taxes. Not all cities make the right assessments. In order to challenge their position, it is imperative that you have your own information.
Sometimes it makes sense to use your property as collateral. You may or may not be able to get the amount you want, but it is imperative to monitor your own capability to repay and you do not want to put up more collateral than what you have borrowed.
You may decide to “gift” property to an heir getting the property out of your estate and getting value to a relative.
Finally, you may decide to invest stocks or bonds with some of the value of your property. It is important to know how much you have.
In addition to all of the good solid financial reasons for getting an appraisal, there is the side benefit of just feeling like you have accomplished something.