Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to perform substantiated real estate appraisals for federally-related transactions. Also by law, you are allowed to demand a copy of the finished report from your lending agency. Contact Appraisal Advisors Group if you have any questions about the appraisal procedure.

Myth: Assessed value should be the same as to market value.

Fact: While most states support the idea that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are exact examples of why this occurs.

Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the property will vary.

Fact: The appraiser has no personal interest in the result of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is established, it should be similar to the replacement cost of the house.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to rebuild a house in-kind.

Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to ascertain the worth of a home.

Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to some facilities, the condition of the house and the value of recent comparable sales. You can count on Appraisal Advisors Group's appraisers to be ethical in assessing this data.

Myth: In a powerful economy - when the costs of properties in a given county are found to be increasing by a certain percentage - the costs of individual houses in the area can be expected to rise by that same percentage.

Fact: Worth appreciation of a certain property is always concluded on a case-by-case basis, factoring in information on comparable houses and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

Have other questions about appraisers, appraising or real estate in Caguas County or Caguas, PR?

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Myth: You can usually see what a property is worth simply by looking at the exterior.

Fact: To find an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.

Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their house, they own their appraisal.

Fact: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the report. Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with it by their lending agency.

Myth: There's no point for home buyers to even care about what the appraisal report contains so long as their lending institution is satisfied.

Fact: It is very important for home buyers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent 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 proximity.

Myth: The only reason someone would hire an appraiser is if a home needs its cost assessed in a lender sales transaction.

Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: You shouldn't need to get an appraisal if you get a home inspection.

Fact: Appraisal reports have almost nothing in common with a home inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. House inspectors will produce a report that will show the condition of the house and its major components and possible damage.