Appraisals

Though the majority of house appraisals are made in advance of a real estate purchase, there are plenty of other reasons they may be ordered. A reduction in property tax burden is probably the second-most common occasion for an appraisal, as homeowners must pay yearly fees in accordance with city and state laws. Oddly, most owners never think to dispute their assessments, even though their figures are often wildly inaccurate.

Another common impetus for house appraisals is the securing of loans, especially the "home equity" variety. These loans are made by lending institutions against the equity built up in a given property, or the amount that the owner can claim as his or her own. Obviously, the higher the value of the house, the more money its owner may qualify to borrow. If he or she is eyeing a second house, namely as an investment, a home equity line may be the only way to go.

Are There Free Home Appraisals Online?

A great many websites bill themselves as providers of free home appraisals, but this is misleading. What they do instead is use a simple calculator to determine a rough approximation for a property's value based on other homes that have listed or sold in that same neighborhood. More advanced calculators will also juggle things like cap rates, square footage, and living space to come to a more accurate figure, but this does not constitute an appraisal.

You may wonder whether this difference between free home appraisals and other valuation methods is merely semantic, which is a fair question. The reason the distinction is so important is that any credible lender will require an appraisal before moving forward with the deal. If you've pinned your hopes on a valuation you've made from an online calculator, you've may have another thing coming.