Do I need a bankruptcy appraisal?

Bankruptcy appraisal provides proof of the value of your home

If you are ever in the situation where you need to file for bankruptcy, and you own a home, you will probably need a bankruptcy appraisal. Choosing a qualified bankruptcy appraiser is important because there are a lot of moving parts in this process and having an accurate market value of your assets is critical.

When you file for bankruptcy the court will require proof of the value of your home. There are various ways to estimate your home’s market value but they do not all provide the same accuracy.

A full appraisal is the most accurate method to determine your home’s value during a bankruptcy. Lesser reliable options for estimating home values include a CMA or BPO. You can also look at online value estimators like Zillow or Trulia but they should not even be considered an option due to their well-known lack of accuracy.

A full interior inspection bankruptcy appraisal should be your number one choice to determine an accurate market value for your home. An experienced and knowledgeable appraiser who is familiar with the area your home is located in will be able to give you the most accurate appraisal.

All appraisers are not the same

All appraisers are not the same so you will want to do some research when choosing the best one. After doing some online research to locate an appraiser in your area you’ll want to dig a little deeper to make sure they qualify for what you need.

Interviewing them is the first step in this process. You will want to find out what type of appraisal education they have, and while a designation by a professional organization such as the SRA designation with the Appraisal Institute is not necessary their membership and continuing education requirements are usually more rigorous, so you’ll benefit from this.

You will also want to know how much experience they have in appraising houses in the area your home is located in. Most appraisers have a market area they cover, such as the Birmingham, AL area where I live.

I perform appraisals in Birmingham and all the surrounding communities and I live in the area. You will want to avoid someone coming in from outside the area, who does not know your specific neighborhood as they may not know the local real estate market.

Recommendations can help

Getting a recommendation for an appraiser can be helpful. One place to start your search is to ask friends and family if they have used someone in the past that they were pleased with. Another group of people to ask are local real estate agents. They have regular dealings with appraisers all the time and can tell you who they trust. Check out my Testimonials page to see what agents say about my reputation as an appraiser as well as my Google recommendations.

The appraiser you choose should be able to provide you with a bankruptcy appraisal that reflects the true market value of your home. They will consider the condition of your home and factor in any recent updates and renovations you have made and also include any repairs that need to be made.

The features of the home will be included and this will help the appraiser locate “comps” that will help provide an accurate market value of your home. The location and school system your home is in are also very important since school systems have a lot to do with property values.

You should also let the appraiser know if they’ll be required to go to court for testimony as this is usually a separate charge than the actual appraisal. It’s best to let them know up front so they can plan and prepare for this.

You will also want to let the appraiser know when the report is needed so it can be finished before the court hearing. A full bankruptcy appraisal may take a little longer than some of the other less reliable methods but it will give you and your bankruptcy attorney the most accurate value to make informed decisions on during your proceedings.

Question

Do you have other questions about a bankruptcy appraisal? I’d love to hear from you, so leave a comment below. As always, thanks for reading.

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