Your home is likely your most valuable investment. But it's hard to know how much it's really worth without selling it.Your tax assessment might give you some idea of your home's value, but the assessment is updated only every few years. What's more, California and other states put a limit on your assessment at a certain percentage increase per year, which means in a booming market your home could be worth much more than its assessed value. In today's market, however, an assessment from a few years ago may be tens of thousands of dollars higher than the actual market value. Getting an accurate sense of a home's value can be critical in certain situations: during a divorce, when settling an estate and when making retirement plans that rely on the equity tied up in your home. (Of course, it's also essential when you're actually buying or selling your house, but in that case the lender will hire the appraiser.) Here's what you need to know to find a reliable appraiser.
Finding an Appraiser"Appraising can be more of an art than a science," admits John Brenan, director of research and technical issues at The Appraisal Foundation , the Congress-approved arbiter of appraisal standards and appraiser qualifications. "The market sets the price, but what that price is likely to be is a matter of opinion." That said, a good appraiser bases his or her opinion on a mix of experience and education, and delivers an appraisal that conforms to the Uniform Standards of Professional Appraisal Practices set by the Appraisal Foundation. These standards direct appraisers' conduct concerning conflicts of interest, unethical requests (such as appraising an item at a predetermined value) and disclosure of fees. Start your search for an appraiser at the federal government's Appraisal Subcommittee Web site, which provides links to state government websites that list state-certified appraisers. Once you've found a few promising appraisers, check to make sure their certifications are still valid. You can also search the national registry to see if they have been subject to disciplinary actions on federal transactions.
Choosing the Right OneOnce you have a list of three or four appraisers who are in good standing, call them. Get a feel for how well they communicate, find out how much they charge and ask for references (and then follow up on them). The price you'll pay depends on how much work is involved. For example, an appraisal that is based on existing information -- square footage, number of bedrooms and bathrooms, road frontage, etc. -- is typically less expensive than one in which the appraiser remeasures everything. The size and location of your house also influence the price. In general, you can expect to pay between $300 and $400 for an appraisal, says Brenan. Ultimately, you'll want to select the appraiser with whom you feel the most comfortable based on references, pricing and your rapport.
What to ExpectStick around and watch while the appraiser does his or her work. In general, a good appraisal can take an hour or so to complete. If your appraiser only takes 15 minutes, you probably aren't getting your money's worth. You should receive a written report within a week detailing the appraiser's visit to your home (be wary of next-day reports, which may indicate slap-dash work). The report should include a cover letter explaining the appraisal, a summary of your home's salient features (such as location, square footage, age and number of bedrooms), a uniform residential appraisal report form (such as the one from Fannie Mae ) and a building sketch or list of dimensions. If you're dissatisfied with the appraiser's conclusions, you can ask him to explain how he arrived at the figure. If you still aren't satisfied, you can always hire another appraiser. But remember, value is a matter of perception. The purpose of hiring an independent appraiser is to get an unbiased opinion of the value of your home -- which may be less sanguine than your own opinion.
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