Table of Contents
- 1. Buying a home
- 2. Selling a home
- 3. Refinancing a mortgage
- 4. Home equity loan or line of credit
- 5. Estate planning
- 6. Date of death value and estate taxes
- 7. Probate
- 8. Divorce
- 9. Investment decisions
- 10. Disputes between co-owners or partners
- 11. Property bonds for bail
- 12. Bankruptcy
- 13. Donating real estate to charity
- 14. Property tax appeals
- 15. Renovating a home
- 16. Eminent domain
- 17. Rezoning or a change in use
- 18. Converting a building to condos
- 19. Short sale or pre-foreclosure
- 20. Litigation
- 21. Gifting real estate
- 22. Removing private mortgage insurance (PMI)
- 23. Charitable remainder trust
- 24. Buying a bank-owned (REO) property
- 25. Co-owner buyouts
- 26. Managing a real estate portfolio
- Should I get my house appraised?
- Getting an appraisal in San Francisco or Marin
The most common reasons to get an appraisal are buying, selling or refinancing a home. Beyond those, appraisals are used for estates and trusts, divorce, gifts, property tax appeals, charitable donations and legal disputes. Below are 26 situations where a real estate appraisal helps.
Some are ordered by a lender. Others are ordered by the owner, an executor or an attorney, who becomes the appraiser's client and decides who sees the report.
1. Buying a home
If you finance the purchase, the lender usually orders an appraisal to confirm the home is worth at least the loan it is making. If the appraisal comes in below the price, you may need to bring more cash, renegotiate or walk away under an appraisal contingency.
Some buyers also order their own appraisal before making an offer, especially when they plan to waive the appraisal contingency in a competitive market. It tells them how far above market value they would be paying.
2. Selling a home
A pre-listing appraisal gives a seller an independent value before choosing a list price. Agents price homes too, but an appraiser has no commission riding on the number.
A seller can also share the report with buyers or their agents during negotiations, and it gives a heads-up when the buyer's lender appraisal might come in low.
3. Refinancing a mortgage
Lenders order an appraisal for most refinances to set the loan-to-value (LTV) ratio: the loan amount divided by the home's value. For a cash-out refinance on a primary home, lenders commonly cap LTV around 80%, so a $1,000,000 home supports a loan of about $800,000.
Some refinances qualify for an appraisal waiver, but when an appraisal is ordered, the value decides how much you can borrow and at what rate.
4. Home equity loan or line of credit
A home equity loan or line of credit (HELOC) borrows against the equity in your home on top of the first mortgage. The lender needs a value to set the credit limit, and depending on the loan size it may order a full appraisal or rely on an automated valuation.
5. Estate planning
Parents planning their estate often want to know what the house is worth today: to decide whether to gift it, leave it in a trust or sell it, and to plan for estate tax if the estate is large. An appraisal gives the estate attorney and CPA a number to plan around.
For the tradeoffs between giving a house away and leaving it to the children, see gifting a house to a family member.
6. Date of death value and estate taxes
When someone dies, their heirs generally take a tax basis equal to the home's fair market value on the date of death. That stepped-up basis decides the capital gains tax when the house sells, so heirs and trustees need it documented with a date of death appraisal.
Larger estates also file a federal estate tax return (Form 706). For deaths in 2026 the exemption is $15 million per person, and California has no estate tax of its own.
7. Probate
In a California probate, a court-appointed probate referee values the real estate for the court inventory, so a private appraiser doesn't prepare that report. Executors still order independent appraisals for the estate tax return, to document the heirs' basis, or for a second opinion on the referee's value.
If the house is in a living trust, it usually avoids probate and the referee, and the successor trustee orders the appraisal directly.
8. Divorce
A divorce appraisal sets the value of the home so it can be divided, whether one spouse buys out the other or the house is sold. In California the home is normally valued as close to the trial date as practicable, though the court can use another date, such as the date of separation, for good cause (Family Code 2552). Attorneys often ask for values at both dates.
Each spouse's attorney may order an appraisal, or the spouses may agree on one appraiser to save cost.
9. Investment decisions
Investors use appraisals to decide whether to hold, sell or refinance a rental property. An appraisal can include a rent survey for a house or small apartment building, which helps show what the property should earn as well as what it would sell for.
10. Disputes between co-owners or partners
When two parties disagree about what a property is worth, such as siblings who inherited a house together, business partners or neighbors settling a boundary deal, an independent appraisal gives both sides one number to work from.
11. Property bonds for bail
Some bail agents accept real estate as collateral instead of cash. To do that, they need to know how much equity the property has, and an appraisal is one way to show its value. California courts can also accept a property bond directly, which likewise requires showing the owner's equity.
12. Bankruptcy
In a bankruptcy, the value of your home affects how much equity your state's homestead exemption protects and what creditors can reach. A bankruptcy attorney may ask for an appraisal to support the value listed in the filing.
13. Donating real estate to charity
To deduct a donation of real estate worth more than $5,000, the IRS requires a qualified appraisal and an appraisal summary on Form 8283, Section B. The appraisal must be made by a qualified appraiser no earlier than 60 days before the donation and received before the tax return is due. See the Form 8283 instructions.
14. Property tax appeals
If your home was worth less than its assessed value on January 1, you can ask the county assessor for a decline-in-value review or file an appeal with the assessment appeals board, and an appraisal is the usual evidence. Assessors tend to give more weight to a well-supported report from a licensed appraiser than to a list of sales an owner pulled together.
Owners who bought near a market peak are the most common candidates. More on how it works in property tax appeal appraisals.
15. Renovating a home
Before a big remodel, an appraiser can value the home as it is now and, if you ask, as if the work were finished. Appraisers call the second one a "subject to" value. It shows whether the project is likely to add as much value as it costs.
Construction and private lenders also require a subject-to appraisal before funding a renovation loan. An appraisal is not a home inspection, though: appraisers don't test the wiring, plumbing or roof. More in does remodeling affect appraisal.
16. Eminent domain
When a public agency wants to buy private property for a public project, it has to offer at least the fair market value set by its own appraisal. In California, the agency must also offer to pay the reasonable cost, up to $5,000, of an independent appraisal the owner orders (Code of Civil Procedure 1263.025). If the two sides can't agree, a court decides the value.
17. Rezoning or a change in use
An appraiser can value a property under its current zoning and under a proposed zoning. Comparing the two shows whether a rezoning or a new use is worth the cost and effort of applying.
18. Converting a building to condos
Before converting a multi-unit building to condominiums, an owner needs to know what the finished units would sell for compared with what the building is worth as a rental. An appraisal can value both, and it can help allocate value among the units.
19. Short sale or pre-foreclosure
In a short sale, the lender agrees to accept less than the loan balance. The lender will want support for the property's value before agreeing to a price, and an owner facing foreclosure may want an independent value to know where they stand.
20. Litigation
Appraisals are used as evidence in lawsuits over real estate: partition actions between co-owners, construction defects, broken contracts and property damage claims. When the appraiser may testify, the report needs to be written with that in mind from the start.
21. Gifting real estate
A gift of real estate worth more than the annual exclusion ($19,000 per recipient in 2026) has to be reported on a federal gift tax return, Form 709. Gifts to a spouse who is a U.S. citizen are an exception. A gift tax appraisal sets the value on the date of the gift and supports adequate disclosure on the return.
22. Removing private mortgage insurance (PMI)
Under federal law, you can ask your lender to cancel PMI once your loan balance reaches 80% of the home's original value, and it ends automatically at 78%. If your home has gained value, many lenders will consider the current value instead, and they usually require a new appraisal to do so. Ask your lender how it handles this before ordering one.
23. Charitable remainder trust
A charitable remainder trust lets you give appreciated property to a trust that pays you income and leaves the rest to charity. The charitable deduction depends on the property's value, so the same IRS qualified appraisal rules that apply to donations apply here.
24. Buying a bank-owned (REO) property
Bank-owned homes are often sold as-is and sometimes need significant work. An appraisal helps a buyer judge whether the price makes sense for the condition, and a lender financing the purchase will order its own.
25. Co-owner buyouts
When one owner buys out another, whether siblings after an inheritance, unmarried partners or friends who bought together, an appraisal sets the buyout price and documents how it was reached.
26. Managing a real estate portfolio
Owners of several properties use periodic appraisals to track equity, plan refinances and decide which properties to sell. For a single home, a market value appraisal serves the same purpose.
Should I get my house appraised?
Get an appraisal when someone else will rely on the number: a lender, the IRS, a court, a county assessor, or family members dividing an estate. In those cases an agent's opinion or an online estimate usually isn't enough. If you only want a rough idea of value for your own curiosity, a free agent estimate or an online tool may be all you need.
Getting an appraisal in San Francisco or Marin
RealVals appraises homes in San Francisco and Marin County for most of the reasons above, from estates and divorces to tax appeals and pre-listing values. Austin Fernald, a California Certified Residential Appraiser, inspects every home himself. Fees start at $500 for a single-family house or condo, with a free quote within one business day.
