When somebody calls and asks whether they need an appraisal, my first question back is what do you need it for.
Most of the time the answer is a good one and we are talking about a real assignment. Once in a while it is not, and I would rather say so on the phone.
So here is the straight version. When you need an appraisal, and when you should keep your money.
When you need an appraisal
Sometimes it is not your call. If you are financing a purchase, the lender orders the appraisal and picks the appraiser.
Everywhere else it comes down to what you need the number for. That answer sets what kind of report it takes and who is going to be reading it, which is why it is the first thing I ask.
Settling an estate is the clearest case. The IRS does not accept assessed value, a Zestimate, or somebody’s opinion, and the value as of the date of death is what sets the heirs’ basis when they eventually sell. Where beneficiaries disagree, an independent appraisal is the only neutral ground.
A divorce needs one for a plainer reason. The value decides how much one spouse pays to keep the house, or how the proceeds get split if it sells. What it really does is take the value off the table as something to argue about, so two people can finish dividing everything else and move on.
A property tax appeal needs one when there is a real case to make. That is a narrower group than most people assume, and I will come back to it.
Then there are houses where the public record does not describe what is actually there. Bi-levels and split-levels, finished space partly below grade, additions the county never recorded. On those, the square footage on file and the square footage an appraiser reports are two different numbers, and you would rather find that out on your own schedule.
When you do not need an appraisal
Just a normal house. Not unique, plenty of comparables.
A two story in Central Park with a basement and a detached two car garage on a typical site. There are a lot of those, they sell regularly, and the recent sales already say what the house is worth. I am not going to find you a different answer than the ones sitting in the MLS.
Central Park will also fool you. It is a big community with a lot of variety in it, and plenty of houses there look nothing like that one. That is why I ask for the address and not the neighborhood.
The tax appeal I talk people out of
When someone calls about a property tax appeal, I tell them whether it might be worth it before I charge them for something that does not make sense.
Usually it is not. My fee is more than the tax savings.
They thank me. It costs me dollars that day, and I think it comes back at some point as a referral or a future client.
I have a page about tax appeals and I have written about how to file one.
Why I ask what you need it for
An agent catches me at a closing and asks whether they should get an appraisal before they list. My answer is usually let me take a look and I will get back to you. Or I ask them why they think they might need one.
Agents almost never try to steer me toward a number. They want the opinion, which is the reason to call an appraiser in the first place.
If the square footage does not match
Pushback does not usually show up before the work. It shows up after somebody reads the report.
The usual one is square footage. Somebody does not think it is right and asks how we came up with it. Depending on the situation, I might offer to come out and measure it again to make sure.
The bottom line
Send me the address and tell me what you are trying to accomplish.
You will get a straight answer either way.
About the author
Charles E. Volk holds the SRA designation from the Appraisal Institute and has appraised residential property across Denver Metro and Boulder County for 24 years. He serves on the Board of Directors of the Colorado Chapter of the Appraisal Institute and holds a Real Estate Broker Associate license with HomeSmart Realty Group. VolkHaus Appraisals works with community banks, credit unions, estate attorneys, CPAs, fiduciaries, and private clients. Colin O’Connor, our Senior Appraiser and a Certified Residential Appraiser, handles a share of these assignments.