Common myths about appraising
Legally, an appraiser is required to be state certified to create substantiated appraisal reports for federally-backed purchase. Also by law, you have the ability to receive a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value will always be equivocal to the assessed value of the property.
Fact: While most states support the concept that assessed value equates estimated market value, this usually is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended period.
Myth: The buyer or the seller will have an influence in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to determine the cost of a house.
Fact: There are many different formulae that an appraiser will use to make a full analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable houses.
Myth: As properties appreciate by a specific percentage - in a robust economy - the homes within the same neighborhood are figured to increase by the same amount.
Fact: All appreciation of worth is on a one-on-one basis, found by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
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Myth: You can often find what a home is worth simply by looking at the exterior.
Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from just inspecting the home from the outside.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal.
Fact: Unless a lender 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 document must be given one by their lender.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lender.
Fact: A consumer should definitely inspect their appraisal; there may be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal report that could 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its price assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Fact: A home inspection has a completely different purpose than an appraisal. The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will show the condition of the home and its major components and possible damage.