Appraisal myths & facts
It is mandated by the government that a real estate appraiser is required to be state-licensed to write appraisals for federally-supported property purchases in California. You have the ability to receive a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: While most states support the idea that assessed value is the same as estimated market value, this usually is not the case. Sometimes when interior remodeling has occurred 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 buyer or the seller often will have some pull in the value of the home depending upon for whom the appraiser is working.
Fact: The opinion of value of the house does not affect the payment of the appraiser; as such, the appraiser has no pressured interest in the cost of the house. What this means is he will complete his business with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement cost of the property should be is on par with the market value.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any outside group to buy or sell. The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the value of a property, like the price per square foot.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to certain facilities, the condition of the property and the cost of recent comparable sales. You can rely on Premier Appraisal of SoCal's appraisers to be honest in assessing this information.
Myth: When the economy is doing well and the worth of homes are found to be increasing by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: Price appreciation of a specific home must be determined on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. This is true in excellent economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact us
Myth: You can usually tell what a home is worth simply by looking at the exterior.
Fact: House 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 just viewing the property from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal report.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. Consumers must be given a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.
Fact: It is very important for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains a great deal of 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: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a house during a sales transaction involving a lending institution.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the home and its main components and reports these findings.