Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to write legitimate real estate appraisals for federally-related purchase. Also by law, you are allowed to demand a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Market value should be the same as the assessed value of the property.
Fact: It is possible that California, like most states, supports the idea that the assessed value equals the market value; however, this is not often the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the Escondido have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Fact: There is no real 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 created.
Myth: The replacement value 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 likely pay a willing seller for a home without being under pressure from any outside group to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the cost of a home.
Fact: An appraisal is a collection of information based on the property's size, location, proximity to certain facilities, the condition of the property and the worth of recent comparable sales. You can rely on The Appraisal Firm's staff to be ethical in assessing this data.
Myth: As properties increase their worth by a specific percentage - in a strong economic state - the houses within the same neighborhood are expected to appreciate by the same amount.
Fact: Any worth at which an appraiser concludes in regards to a particular house is always personalized, based on certain factors found from the data of comparable houses and other considerations within the house itself. It makes no difference if the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in San Diego County or Escondido, CA?Contact us
Myth: Just looking at what the property looks like on the outside gives a good idea of its value.
Fact: There are a number of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by looking at the house from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their home, they own their appraisal report.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given it by their lending company.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies 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 report makes an invaluable record for future reference, comprised of helpful and often-revealing information - including 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 property needs its cost estimated in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. A home inspector assesses the condition of the property and its major components and reports these findings.