It is well known that a home appraisal is used to ascertain the monetary value of a real estate property. Banks regularly use appraisals to help determine whether or not they should approve a mortgage application, so that the property’s value is sufficient should a foreclosure occur. However, what is the value of an appraisal to a home owner/seller?

1. Getting a property appraised will clearly establish its value, which makes it more difficult for real estate agents or potential buyers to underestimate how much it is worth.

2. An appraisal can help the owner more realistically determine a selling price for the home, rather than roughly estimating its value or relying upon a realtor to set the price for him or her.

3. Generally, appraisals remain valid to mortgage lenders for 90 to 180 days, so they won’t require a new appraisal as part of the closing costs if the property sells within this time period.

4. An appraisal may be necessary before obtaining a second mortgage or home equity loan from a bank. This will remain useful for selling the property until it is out of date.

5. Appraisals may also be used for some types of home insurance valuation purposes. Some appraiser and city web sites indicate that an appraisal can be utilized when disputing property taxes as well.

Unfortunately, there are also some factors which limit the value of appraisals. One such factor is the potential for inaccuracies to exist; for example, an appraiser may not see less obvious problems that a thorough home inspection might reveal - accidentally causing the property to be overvalued in the appraisal.

Another problem is the possibility for unexpected events to increase or reduce the home’s value at any time after it is appraised. In some cases an owner can adjust the valuation relatively easily (an acre is seized by eminent domain) to suit the changes, while in others he or she cannot (a noisy business appears across the street).

Basically, the value of a home appraisal is that it can be used for mortgage and insurance purposes, it gives a clearer indication of how much the home can be sold for, and it prevents others from undervaluing the home. However, it is not without the potential to quickly become outdated and/or contain inaccuracies.