Appraisal myths debunked

By law, an appraiser must be state-licensed to perform appraisals for federally-related transactions. The law allows you to get a copy of your finished appraisal report from your lender after it has been provided. Contact The Appraisal Firm if you have any concerns about the appraisal procedure.

Myth: Market value should be the same as the assessed value of the property.

Fact: It could be that California, like most states, validates the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are excellent examples of why there might be a differential in price.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the home will vary.

Fact: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.

Myth: The replacement cost of the house is always is on par with the market value.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any outside group to purchase or sell. If the house were reconstructed, the dollar amount required to do so would make up the replacement cost.

Myth: Certain methods, such as the price per square foot, are what appraisers use to come to the price of a house.

Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to some facilities, the condition of the house and the value of recent comparable sales. You can rely on The Appraisal Firm's appraisers to be ethical in assessing this information.

Myth: In a robust economy - when the sales prices of houses in a given region are reported to be appreciating by a certain percentage - the values of individual properties in the proximity can be expected to increase by that same percentage.

Fact: All increase of worth is on an individual basis, found by data on relevant considerations and the data of comparable houses. It makes no difference whether the economy is powerful or terrible.

Myth: The house's exterior is determinate of the actual price of the house; there is no need to do an interior inspection.

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be derived simply by inspecting the house from the exterior.

Myth: Because the consumer is the one who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with one by their lending agency.

Myth: It doesn't concern consumers what's in the report so long as it satisfies the needs of their lender.

Fact: A consumer should definitely look through their document; there will probably be some questions or some concerns about the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with helpful and often-revealing information - 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 vicinity.