These are the most common reasons that you need an Appraisal:
1. Financing a Home Purchase
2. Refinancing your Home
3. Estate or Trust Valuation
4. Divorce Settlement
5. Bankruptcy Settlement
All Valuations are not Appraisals. In California an “Appraisal” can only be performed by State Licensed Real Estate Appraisers which are requested by quality Lenders. Valuation services are performed by Realtors are called BPO’s or Broker Price Opinions. In general, these are not accepted by the Lending Industry as the are not considered reliable due to their methodology and that only State Licensed Appraisers can call their valuation an “Appraisal”. Fannie Mae & Freddy Mac only accept Appraisals by a State Licensed Appraisers. Quality Attorneys only use State Licensed Appraisers. There out of State Services that provide what they call an Appraisal and are not recognized by the State of California Bureau of Real Estate Appraisers, Fannie Mae or Freddie Mac. These companies send out Unlicensed Inspectors that take notes and pictures that are emailed to another State in which an individual, Not Licensed by the State of California, completes a Valuation for a Lender. Some Lenders accept these Valuations because they are less expensive. These Valuations are also less reliable due to limited data used by the company doing the Valuation. Data sources cost money. A good State Licensed Appraiser uses a data base that captures all sales recorded by HCD (Housing & Community Development) Plus the Real Estate MLS (Multiple Listing Service) These reports from out of state sources are inferior based on this lack of data as well as the Valuation methods used.
Home Buyers Beware…… Between 80 to 90% of all Mobile Home Purchases are for Cash and never receive an Appraisal. This is because the Buyer does not request an Appraisal or the Sales Agent tells them they do not need one because it is a cash transaction. I have done appraisals for over $1,000,000 for Mobile Homes in Malibu. What generally changes the fee for an appraiser is the Complexity of the Valuation not the price of the home. An Appraisal is done for a flat fee whether the home sells for 40K or 400K. Sales agents are generally paid as a percentage of the sales price which may be a good thing for the Seller buy not the Buyer.
Guy G. Hall California State Certified Real Estate Appraiser Appraisal Guy, Inc.