The valuation performed by a professional in order to determine the worth of an asset is called an appraisal. Obtaining an appraisal is typically required when property that is difficult to value is transferred, taxed, or insured.
Due to the unique nature and condition of assets such as real estate, jewelry, art, and automobiles, the skills of a professional are frequently needed to determine a reasonable market value for the asset. Real estate professionals are often trained to perform appraisals on homes. In most instances, a professional fee is charged to the property owner for a formal, or written, document.
The following list demonstrates how appraisals may be used:
- Insurance: determining the value of a home for a homeowner's insurance policy. Jewelry, art collections, coins, or other valuables may also require a formal appraisal to be insured.
- Real Estate: determining the value of a home to qualify for a mortgage, in the settlement of an estate, to support a divorce proceeding, or to determine the equity in a home for a loan or line of credit.
- Taxes: appraisals are often required to verify the value of donated property such as a car.
- Sale of Property: nearly everything of special value: furniture, antiques, coins, jewelry, any type of collectible, can be subject to an appraisal prior to sale.
escrow account, closing costs