When to get an Appraisal

There are numerous reasons for engaging an Austin Appraiser and obtaining an Appraisal of a home or property in Austin. The most common reason by far is for a real estate sale, listing, or mortgage loan transaction. Below is a list of common reasons for getting an Austin Appraisal:  

• Obtain a loan or refinance an existing one
• Contest high property taxes
• Settle property in a divorce or partnership dispute
• Satisfy a government agency requirement such as the IRS
• Establish the replacement cost for insurance claims or coverage
• Help you make informed financial decisions with real estate
• Determine a reasonable price when selling real estate
• Provide a negotiating tool when purchasing real estate
• Use in a lawsuit, such as when damages occur and the parties cannot agree
• Protect your rights in a condemnation case
• Obtain a value for a property by an objective party not paid on commission
• Settle an estate after the death of an owner

Here are some explanatory comments to consider:

Settling an Estate

When a death occurs and property is involved, heirs (or the executor of an estate) often want to know the value of the property, particularly when two or more people inherit a property and one or more of them want to cash out their portion or dispose of the property entirely. Taxing authorities such as the IRS sometimes require appraisals to establish the value of an estate when unpaid taxes are involved.

Establishing Replacement Cost for Insurance

Usually appraisals obtained for establishing the loss risk in case of fire are limited to providing a professional estimate of the replacement or reproduction cost of the improvements to the property. In most cases the insurable value is not representative of the actual market value and does not include the value of the land. Insurance agents sometimes order appraisals when their cost estimating data does not provide enough information for an atypical home or structure. Property owners on the other hand may order appraisals to contest the annual appreciation increases mandated by some insurance companies, especially when the increase in the insurance coverage results in an unrealistic premium.

Establishing Just Compensation for Condemnation

An appraiser can provide services to either the landowner or the condemning authority. Usually, the government entity that needs the land for public use orders an appraisal and offers to purchase the land for the value indicated by the appraisal. The landowner may also order an appraisal, should he or she feel that the amount offered by the condemning authority is too low.   If the parties cannot agree on a price, the matter will be settled in court with each appraiser testifying on behalf of their respective value estimates. Appraisers should never be advocates of their clients - they are just expert witnesses trying to support their value estimates. In many cases the landowner will not order another appraisal from an appraiser of their choice. Instead, he or she tries to settle with the authority by negotiation rather than incur the expense of an appraisal. However, the investment for an appraisal is often well worth it, since the landowner's negotiating position can be enhanced if a supporting professional appraisal report is available that demonstrates clearly that the property is worth more than the condemning authority is offering.

Contesting High Property Taxes

If a property owner feels that his property is assessed too high for tax purposes, he may order an appraisal from a qualified appraiser to contest the assessment. In some parts of the country this is common practice. Nevertheless, many property owners are not aware that this avenue for reducing their tax burden is available. The return on investment is easy to see when the relatively low cost of an appraisal is compared to several years of lower taxes. In some cases such assignments include an appearance in front of the equalization board to argue the landowner's case. A qualified appraisal may uncover information not available to the taxing authority, or perhaps provide correction to such important factors as house size, land value, and more which could result in a favorable decision for the property owner.