Appraisal myths debunked
Legally, a real estate appraiser must be state certified to create substantiated real estate appraisals for federally-backed sales. You have the ability to acquire a copy of the completed appraisal from your lending agency. Contact The Appraisal Firm if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this generally is not the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the area have not been reassessed for years or more, it may vary wildly.
Myth: The opinion of value of a house will change depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The cost of the property does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the worth of the home. What this means is he will conduct business with impartiality and independence regardless for whom the appraisal is conducted.
Myth: The replacement value of the home is always is on par with the market value.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a certain house, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount necessary to do so would be the replacement cost.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to ascertain the value of a home.
Fact: An appraisal report is a collection of information based on the property's size, location, proximity to specific facilities, the condition of the property and the price of recent comparable sales. You can count on The Appraisal Firm's appraisers to be ethical in assessing this information.
Myth: When the economy is on the rise and the value of homes are found to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Value increase of a specific house is always determined on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is doing well or declining.
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Myth: Just examining what the home looks like on its exterior gives a good idea of its value.
Fact: There are a number of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data needed.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your house, you own the provided appraisal.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be provided with it by their lending company.
Myth: There's no need for home buyers to even concern themselves with what the report contains so long as their lender is fine with the contents therein.
Fact: A consumer should definitely read through their document; there may be some questions or some worries with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable 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 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: Based upon their qualifications and designations, appraisers can and may provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you order a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. The point of an appraisal report is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will create a report that will show the condition of the home and its major components and possible damage.