Common myths about appraising

Legally, a real estate appraiser must be state certified to create legitimate appraisal reports for federally-backed transactions. You have the ability to acquire a copy of the finished appraisal report from your lender. Contact Appraisal Advisors Group if you have any concerns about the appraisal procedure.

Myth: Assessed value should always be similar to to market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why this occurs.

Myth: The buyer or the seller may have an influence in the cost of the house depending upon for whom the appraiser is working.

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

Myth: Market value will approximate replacement cost.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount needed to rebuild a house in-kind.

Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a house.

Fact: An appraisal is a collection of information based on the property's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can count on Appraisal Advisors Group's appraisers to be professional in assessing this information.

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

Fact: All appreciation of value is on an individual basis, concluded by information on relevant considerations and the data of comparable houses. This is true in strong economic times as well as poor.

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Myth: The property's exterior is determinate of the actual price of the home; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found simply by examining the house from the exterior.

Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Home buyers have to be supplied with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even worry about what the appraisal contains so long as their lending agency is satisfied.

Fact: A home buyer should definitely read through their appraisal report; there could be some questions or some worries with the accuracy of the analysis that should be addressed. 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, containing useful and often-revealing data - 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 area.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending institution.

Fact: Depending upon their qualifications and designations, appraisers can and may perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

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

Fact: A home inspection report has a completely different purpose than an appraisal. The appraiser finds an opinion of value in the appraisal process and resulting appraisal report. House inspectors will write a report that will show the condition of the home and its major components and possible damage.