More than 400 years ago, Sir Francis Bacon wrote that “knowledge is power” and today that adage still rings true, especially in real estate! Any time you are buying or selling property, it makes good financial sense to get an appraisal of value and know the facts.

While the most common reason to order an appraisal is to secure a mortgage loan, appraisals are useful in a variety of other situations, including (but not limited to):

• Determining a reasonable price when selling your home
• Assuring that you do not overpay when purchasing a home
• Establishing home replacement cost for insurance purposes
• Resolving disputes including foreclosures, zoning issues, property partitions or divorce
• Evaluating feasibility of investment opportunities, including cost/benefit analysis of remodeling
• Establishing the value of your home during employee relocation
• Settling or dividing an estate
• Assessing property for taxes or financial review
• Qualifying to eliminate private mortgage insurance (PMI)
• Documenting the value of property for a government agency, such as the IRS

According to the Appraisal Institute, the following questions are suggested:

• Are you licensed or certified in the state in which you live?
• What professional designations do you have and from what groups?
• How long have you been in practice?
• What level of experience do you have in this particular market and with this type of property?
• Are you familiar with property in this neighborhood?
• What types of clients have you had (homeowners, estates, lenders, relocation companies)?

Don’t trust your finances to guesswork! From Trulia to Zillow, and Redfin to Eppraisal, numerous websites have popped up on the internet that claim to “make it easy and fun” to assess your home’s value “in a matter of seconds.” Some banks and realty companies even offer home value estimators. However, these sites only offer estimations done by a computer. Computers do not account for all the details surrounding a specific property, such as upgrades, renovations or much-needed repairs; strength of the market where the home is located; landscaping and property enhancements; and numerous other factors a certified appraiser considers. Rarely do online home values match with appraised values, resulting in skewed information that is higher or lower than what the property is actually worth.

Always make sure that the appraiser you are using is state licensed or certified. A list of appraisers meeting Arizona state requirements is regularly updated and can be found at the Arizona Department of Financial Institutions. (https://boa.az.gov/directories/appraiser) To become licensed or certified, appraisers must fulfill rigorous education and training requirements. In addition, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP) written by the Appraisal Foundation. (www.appraisalfoundation.org)