Appraisal myths & facts
By law, an appraiser is required to be state-licensed to produce appraisals for federally-backed purchases. You also have the right to acquire a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: While most states back the idea that assessed value approximates estimated market value, this commonly is not the case. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: The buyer or the seller may have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the worth of a home.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: When the economy is on the rise and the value of homes are reported to be rising by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.
Fact: Cost appreciation of a certain property must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. This is true in excellent economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Anne Arundel County or Severn, MD?Contact W. Eric Howard & Associates
Myth: The house's exterior is determinate of the actual price of the home; there is no need to do an interior appraisal.
Fact: Property worth is determined by a multitude of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived just by viewing the property from the exterior.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance real estate, they legally own their appraisal.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the report. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with it by their lending company.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending company.
Fact: It is very important for consumers to peruse a copy of their report so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal that should be useful to the home buyer 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: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a home during a sales transaction involving a lending company.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection. An appraiser finds an opinion of value in the appraisal process and resulting report. House inspectors will write a report that will express the condition of the property and its major components and possible damage.