Appraisal myths debunked
By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported sales. Also by law, you are allowed to receive a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser should be the same as the market value.
Fact: While most states support the concept that assessed value approximates estimated market value, this commonly is not the case. Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the Mission Viejo have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the value of the home will vary.
Fact: The cost of the property does not affect the salary of the appraiser; as such, the appraiser has no vested interest in the cost of the home. Obviously, he will provide business with impartiality and objectivity 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 property without being under pressure from any external party to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to determine the worth of a house.
Fact: There are many differing ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.
Myth: When the economy is robust and the worth of houses are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a certain home is always individualized, based on certain factors pulled from the data of comparable homes and other specifications within the property itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact our professional staff
Myth: The property's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior appraisal.
Fact: Property worth is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply viewing the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. However, consumers have to be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lending agency.
Fact: It is very important for home buyers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with useful and often-revealing information - including 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a house during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of requirements 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: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The appraiser forms an opinion of value in the appraisal process and resulting report. The task of a home inspector is to approximate the condition of the home and its main components, then compose a report on these findings.