Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed sales. Also by law, you have the right to demand a copy of the finished appraisal report from your lender. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: While most states support the concept that assessed value approximates estimated market value, this commonly is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby homes are perfect examples of why the price can vary.
Myth: The buyer or the seller will have an influence in the value of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property will be is on par with the market value.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under duress from any external party to purchase or sell. If the house were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the opinion of value of a property, like the price per square foot.
Fact: There are many differing formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable homes.
Myth: When the economy is strong and the sales prices of properties are found to be appreciating by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.
Fact: All increase of worth is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in San Diego County or Escondido, CA?Contact The Appraisal Firm
Myth: The property's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Fact: Property value is concluded by a number 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 property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Home buyers have to be provided with a copy of the report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lending agency.
Fact: Only if home buyers examine a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, containing helpful and often-revealing data - including, but not limited to, 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 hire an appraiser is if a property needs its worth estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you have had a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process and resulting report. A home inspector assesses the condition of the house and its major components and reports their findings.