Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-related purchases. The law gives you the right to receive a copy of your completed appraisal from your lender after it has been provided. Contact The Appraisal Firm if you have any concerns about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. There are times when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the property 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 conducted.
Myth: Market value should equate to replacement cost.
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 particular home. Replacement value is the dollar amount necessary to rebuild a home in-kind.
Myth: There are specific methods that appraisers use to determine the cost of a home, like the price per square foot.
Fact: Appraisers complete an exhaustive 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 doing well and the cost of properties are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: Cost appreciation of a specific house has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It doesn't matter if the economy is on the rise or declining.
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Myth: You can commonly find what a property is worth simply by looking at the exterior.
Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be derived just by examining the property from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their home, they legally own their appraisal report.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. Home buyers must be supplied with a version of the document through request as per the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending agency is satisfied.
Fact: Only if consumers examine a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains an incredible amount of information - including, but certainly 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. House inspectors will create a report that will determine the condition of the home and its major components and possible damage.