Hiring a Property Appraiser
How much is the home you're thinking about buying worth? A key component of determining this is hiring a professional property appraisal. An appraisal can serve a couple of different needs for a buyer. First, it is required for your mortgage. Second, it can help you determine what to bid for your home.
It's important to know that you (as a buyer) don't necessarily need to hire a property appraiser. Assuming you are planning on taking out a mortgage to finance the purchase of your new home - your lender will require that you have the home appraised in order to determine the value of the home they are lending against. The lender will typically have appraisers that they work with or are referred to in your area and often, people simply rely on the lender's selection.
However, you may wish to be involved in the selection of an appraiser. Or you may want to hire your own to help with your bidding strategy. So, here are some things to think about in looking for an appraiser:
Always make sure a property appraiser is licensed or certified by the state to perform real estate appraisals. While state licensing and/or certification isn’t always an indication of quality, it ensures that an individual is has met certain standards and been authorized to perform property appraisals. Some states do not require licensing to perform real estate appraisals. It is unwise to use the services of any professional who is not licensed or certified.
Don’t be afraid to ask an appraiser for a copy of their license. A good appraiser will readily provide this documentation. Copies of licenses are commonly requested by mortgage brokers and loan officers. Once you get a copy of their license, it’s a good idea to check with the government agency which issued the document to ensure the license is active and in good standing.
Many excellent real estate appraisers carry a professional designation. The most widely known industry designations are SRPA, SRA and MAI. These designations are issued by the Appraisal Institute. These designations demonstrate an appraiser's commitment to continuing education and ethical standards. Oftentimes, the standards required to obtain these designations exceed those set forth by state licensing/certified requirements.
Ask the real estate appraiser what percentage of their work is performed in the neighborhood in which the property is located. Appraisers who do a lot of their work or live in a particular area often have a deep knowledge of property values in that area. Additionally, they are more likely to know how “neighborhood variables” such as school districts and fire departments affect the property values in the area.
Find out if the property appraiser has experience performing appraisals for consumers as opposed to real estate professionals. Mortgage brokers and loan officers have distinctly different needs than homeowners. An appraiser who understands the needs of homeowners is more likely to help you learn about the appraisal process and answer questions you may have along the way.