Common myths about appraising
Legally, a real estate appraiser has to be state certified to create legitimate real estate appraisals for federally-related transactions. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact The Appraisal Firm if you have any concerns about the appraisal procedure.
Myth: Assessed value should always equate to market value.
Fact: While most states back the idea that assessed value approximates estimated market value, this often is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: The opinion of value of a house will change depending upon if the appraisal is provided for the buyer or the seller.
Fact: The appraised value of the house does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the value of the house. What this means is he will provide business with impartiality and independence regardless for whom the appraisal is provided.
Myth: The replacement cost of the home is always is on par with the market value.
Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. The replacement cost is the dollar amount required to reconstruct a house in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a property.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: As properties increase their worth by a specific percentage - in a strong economic state - the properties in proximity are figured to increase by the same amount.
Fact: Worth appreciation of a specific house must be concluded on an individualized basis, factoring in information on comparable properties and other relevant considerations. This is true in strong economic times as well as bad.
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Myth: The house's exterior is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
Fact: House value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data needed.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance real estate, they legally own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Home buyers must be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it satisfies the necessities of their lending agency.
Fact: It is very important for consumers to go through a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report that will probably 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 region.
Myth: The only reason someone would hire an appraiser is if a home needs its value estimated in a lender sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection. An appraiser forms an opinion of value in the appraisal process and resulting report. House inspectors will produce a report that will explain the condition of the home and its major components and possible damage.