An individual seeking to become a real estate appraiser must meet strict requirements, including a bachelor’s degree and state licensing. The licensing required will vary by state, but potential appraisers must meet minimum standards set by the federal government. Real estate appraisers are called for in a variety of situations, including when a property is sold, mortgaged, developed, insured, or taxed. Other situations in which a real estate appraiser may be required include:
Tax assessments and appeals of those assessmentsNegotiating a leasePurchase-price negotiation between buyers and sellersA government agency acquiring private property for public use
How Real Estate Appraisers Work
The most common situation in which you’ll encounter a real estate appraiser is when you want to buy a home. Much risk is involved when lenders choose to lend you money, especially when the loan runs into hundreds of thousands of dollars. To help mitigate this risk, lenders will employ a real estate appraiser to create an appraisal of your home. The process is helpful for both parties. Home appraisals help lenders ensure that the value of the property matches your purchase price. You, meanwhile, can get an accurate picture of the home you’re trying to buy, including lot size, square footage, and more. Fortunately, finding a real estate appraiser isn’t something you’ll have to deal with. Banks contract their own home appraisers to complete an appraisal. However, just because you won’t be locating the real estate appraiser yourself doesn’t mean the home appraisal will be free—you’ll need to pay for it. The average cost for an appraisal is around $300 to $400. You’ll find the exact amount for it on your Closing Disclosure form as part of the loan’s closing costs. If all goes well with the real estate appraisal, the bank will move forward with your loan. However, if the appraisal value doesn’t match the purchase price of the property, you may have to front more money to cover the gap between the two numbers. You might also have to renegotiate the home’s price. If neither happens, the sale could fall through.
Do I Need a Real Estate Appraiser?
Real estate appraisers are usually required when it comes time to purchase a home. There are some instances in which a lender may opt to waive in-person appraising, such as when a home already has been recently appraised. However, employing real estate appraisers is more common than not. Certain refinancing options may also allow you to skip in-person appraisers, such as using the Veterans Affairs (VA) interest rate reduction refinance loan. For other situations, you still may want to hire a real estate appraiser for yourself. This may be useful when you’re considering putting your property on the market but don’t have any idea about market conditions. A realtor can usually give you a fair judgment, but an appraiser’s valuation is far more detailed.
