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When it comes to buying real estate there are a few added expenses involved. One of those expenses, that people often question, is the appraisal. At a cost of about $400 some would rather save their money, and they wonder why they are forced to fork out the cash to an appraiser.

After all, if they are willing to buy the house, then why do they need to find out what it's worth? The real estate professionals obviously think it is valued correctly.

The reality is that, no matter what type of property you are buying, you need an appraisal. There are a few simple reasons for this.

First of all, if you are mortgaging the property, the lender will require it. A financial institution doesn't want to loan you $200,000 for a house that is worth half of that. For this reason they do require an appraisal. The appraisal gives a lender an unbiased professional opinion as to the property's value.

The next reason you need an appraisal follows along the same lines as the reason you get an inspection done. You don't want to buy a home only to find out 2 months later that it isn't worth what you paid. A home is the largest investment most people make in their lifetime. It is important to take the steps to protect yourself.

There are also other reasons that you may need an appraisal with your purchase. It can reduce your tax burden, in some cases the IRS requires it, and it also gives you a tool for negotiation. If the assessed value is lower than the asking price, you suddenly have a reason for making a much lower offer. This same idea can help you to contest high property taxes. There are also issues that may arise in the case of a lawsuit, if a proper appraisal wasn't done.

Whenever you take part in a real estate transaction, you should hire a professional appraiser who is licensed in your state. The appraiser will come in, look over the property, compare it to other properties in the area, and give you a professional, unbiased, opinion of what the property is worth.

The simple fact is that if you are thinking buying a property the small cost of an appraisal far outweighs the implications of not having one. It is quite possible that $400 will save you that cost many times over. If you buy a home only to find out 3 months down the road that you have a broken foundation and your air conditioning unit needs to be replaced, $400 doesn't sound like a whole lot of money.

Your real estate agent may have a good idea of what the home is worth, but they only look at the cosmetics of the home. Realtors are not licensed inspectors nor are they appraisers. They rarely see below the surface where problems that may really affect the value are. The appraiser's value is based on all factors, even the ones that can't be seen.