Common myths about appraising
Legally, an appraiser needs to be state certified to write substantiated real estate appraisals for federally-supported transactions. The law allows you to get a copy of your finished appraisal from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value generally will equate to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the value of the house will vary.
Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: There are specific methods that appraisers use to find the cost of a property, like the price per square foot.
Fact: There are many varied formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable properties.
Myth: When the economy is robust and the sales prices of houses are reported to be increasing by a certain percentage, the other houses in the proximity can be expected to increase based on that same percentage.
Fact: Any worth at which an appraiser concludes in regards to a particular house is always individualized, based on certain factors pulled from the data of comparable properties and other considerations within the house itself. This is true in excellent economic times as well as bad.
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Myth: You can generally see what a house is worth simply by looking at the exterior.
Fact: Home value is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by looking at the house from the exterior.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance real estate, they own their appraisal report.
Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers must be provided with a version of the document through request because of the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their document so long as it exceeds the needs of their lending group.
Fact: Only if home buyers read a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal report that could be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.
Myth: The only reason someone would order an appraisal is if a house needs its worth assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. House inspectors will produce a report that will show the condition of the home and its major components and possible damage.