Officially, appraisals are a certified document that is guaranteeing a bank that the subject piece of real estate being purchased has a certain value. Banks require appraisals when any Petoskey Michigan real estate or Traverse City Michigan real estate is being purchased. Of course it applies to all the other cities in Michigan, but I need to promote certain cities from time to time. Anyway, fees for appraisals will range from $225 for a person who pays for a lot of appraisals from the same company to $1,000 for a standard commercial appraisal. 

No matter what you think what an appraisal really is, they are required to make any moves in the real estate business. It is thought that a piece of property is worth whatever somebody is willing to pay for it. Well, that is the exact truth, however, you must appease the person who will ultimately be paying for the piece of property. More times than not, a bank is fronting all the money, so they need to make sure their investment is at least worth what is being paid for the piece of northern Michigan real estate.

I have wrote many articles on what the "re-financing of America" has done to the real estate market. Many people believe that if they refinance and payoff credit cards, boats and cars, that their home must be worth whatever the appraisal. It is undisputed that your property is worth whatever another individual is willing to pay for it in a timely fashion. Let me explain (even though I shouldn't). Your single wide trailer home on a lot in the middle of nowhere will be worth a million dollars. Granted, you'd have to wait about 150 years, but it will sell for that much in time. Values of homes should be based upon what they will sell for within 6 months. If they didn't sell, then the piece of property was probably overpriced. Let me stop there.

It is always important to get an appraisal done whether or not you need a bank to finance the property. I have seen "virgin" buyers come to northern Michigan to purchase real estate and think they are getting a great buy. Well, they would be if that property was downstate. Markets vary from region to region, so I can't stress enough the importance of an appraisal. However, just use this as a guideline and not an absolute. There is no exact science when determing northern Michigan real estate property values.