An appraisal isn't something most homeowners worry about. When you buy a home, the lender typically arranges for an appraisal and the buyer pays for it, but otherwise, it's not something that most homeowner pay a lot of attention to.

There are, however, times when a homeowner or borrower may wish to arrange for their own appraisal. At these times, having your own assessment of the value of your property may cost a little money - typically about $250 -$500 - but can pay for itself in financial returns or peace of mind.

Selling your home

The first situation where you might want to pay for your own appraisal is when selling your home. Most sellers rely on the advice of their real estate agent in setting a price; however, if that price strikes you as too low, it might be worthwhile to get a second opinion. The few hundred dollars you'll pay for an appraisal could easily be recouped by a higher estimate

Although real estate agents typically have a pretty good idea of what the market will bear, the steep declines in home values in recent years have thrown a lot of uncertainty into the process, so getting an assessment by a professional appraiser can be useful. Also, when it comes time to negotiating with a buyer, you'll be in a far stronger position if you can show that your price is based on a professional appraisal.

Buying a home

When buying a home, you might want to contract for a second appraisal if the one arranged by the bank won't support the loan you need. If your appraisal comes in significantly below what you were expecting, you may wish to consider hiring an appraiser yourself to get a second opinion - it may be that the original appraiser was not familiar with the area or was under pressure to complete a lot of appraisals quickly and did not provide an accurate appraisal of the property's value.

Again, this problem has been exacerbated by steep declines in property values and the growing influence of foreclosures on property values, which make it difficult to obtain an accurate estimate of a home's true value.

Under new rules governing appraisals, lenders can no longer directly contract for appraisals on properties to be financed with conforming loans (those backed by Fannie Mae or Freddie Mac). Instead, they have to contract them through a third party, to avoid potential conflicts of interest. However, there's no rule that says the BUYER cannot contract for their own appraiser, provided the lender accepts their assessment.

Refinancing

If you've been turned down for a mortgage refinance or are being asked to pay what seems to be an unreasonably high interest rate because you don't have enough equity in the home, you might consider having an independent appraisal done by a certified appraiser. The situation is similar to the one described under buying a home, above; you want to make sure you're having an appraisal done by someone who is familiar with your local market.

Again, this problem has been exacerbated by steep declines in property values and the growing influence of foreclosures on property values, which make it difficult to obtain an accurate estimate of a home's true value.

One time when obtaining your own appraisal can really pay off is in appealing the official assessment of your property for property tax reasons. Because local governments rely on property taxes for operating revenue, they may be less than eager to fully recognize just how much home values have actually fallen in their community. Having a professional, certified appraisal to present to the Board of Review can be a major asset in your favor.

PMI Removal

If you've been paying private mortgage insurance (PMI) on your home loan and believed you've reached the point where you now have a 20 percent equity in the property, you'll probably want to apply to eliminate the PMI requirement. Doing so means you're going to need an accurate assessment of the property value and therefore, an appraisal. However, given the recent decline in home values, this is likely to be a fairly uncommon scenario for some time to come.

Divorce

If you and your spouse are splitting, you're going to need an accurate assessment of the value of your shared home in order to help determine a fair division of martial assets.

If you do choose to hire your own appraiser for these or any other reason, make sure the one you hire is licensed or certified in your state and has experience working in your community. True, hiring an assessor may cost you a few hundred bucks, but if it allows you to get a better sales price, be approved for a loan on the home you really want or knock down you tax assessment, it can be well worth it.