Appraisal myths & facts
It is enforced by legal agencies that a real estate appraiser needs to be state-licensed to offer appraisals for federally-supported home purchases in California. The law entitles you to get a copy of your finished appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value should be similar to to market value.
Fact: While most states support the suggestion that assessed value approximates estimated market value, this generally is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The appraised value of a house will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will equal replacement cost.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under pressure from any outside party to buy or sell. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the value of a property, such as the price per square foot.
Fact: Appraisers make a detailed analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: In a robust economy - when the prices of houses in a given neighborhood are reported to be rising by a certain percentage - the values of individual properties in the proximity can be expected to appreciate by that same percentage.
Fact: All appreciation of value is on a case-by-case basis, concluded by data on relevant elements and the data of comparable homes. It makes no difference if the economy is good or poor.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact us
Myth: You can usually find what a property is worth simply by looking at the exterior.
Fact: Property value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply inspecting the house from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they own their appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given it by their lender.
Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lender is fine with the contents therein.
Fact: It is almost imperative for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a property during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection.
Fact: Appraisal reports are completely different than a home inspection report. The purpose of an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will write a report that will determine the condition of the home and its major components and possible damage.