Common myths about appraising
By law, an appraiser is required to be state-licensed to produce appraisals for federally-backed transactions. You also have the right to request a copy of the completed appraisal from your lending agency. Contact The Appraisal Firm if you have any questions about the appraisal process.
Myth: Assessed value should be similar to to market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: Depending on if the appraisal is done for the buyer or the seller, the cost of the house will vary.
Fact: The appraised value of the house does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the home. This means that he will conduct job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular house, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a house.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to undesirable facilities, the condition of the home and the value of recent comparable sales. You can count on The Appraisal Firm's staff to be honest in assessing this information.
Myth: In a robust economy - when the worth of properties in a given neighborhood are reported to be increasing by a certain percentage - the costs of individual houses in the proximity can be expected to increase by that same percentage.
Fact: All appreciation of value is on a case-by-case basis, concluded by information on relevant conditions and the data of comparable homes. This is true in excellent economic times as well as bad.
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Myth: The property's exterior is determinate of the actual price of the house; it is unnecessary to do an interior inspection.
Fact: To determine an accurate value beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply examining the home from the outside.
Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your home, you own the provided appraisal.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it exceeds the requirements of their lending company.
Fact: Only if consumers read a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal report that will probably 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The task of the appraiser is to find an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the house and its main components and reports their findings.