Common myths about appraising
Legally, a real estate appraiser needs to be state certified to write legitimate appraisal reports for federally-backed transactions. You also have the right to request a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value should be equal to market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Generally when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the cost of the home will vary.
Fact: The price of the home does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the cost of the house. What this means is he will conduct job with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement value of the house should be is on par with the market value.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside group to purchase or sell. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a home.
Fact: Appraisers complete a detailed analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: As properties increase their worth by a certain percentage - in a strong economy - the properties within the same neighborhood are figured to increase by the same amount.
Fact: Price appreciation of a certain property is always concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.
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Myth: The home's outside is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your house, you own the ordered appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given it by their lender.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely read through their appraisal; there may be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an report that should 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: Appraisers are hired only to estimate home values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection report.
Fact: A home inspection report has a completely different purpose than an appraisal report. An appraiser forms an opinion of value in the appraisal process and resulting appraisal. A home inspector determines the condition of the house and its main components and reports these findings.