Appraisal myths debunked
Legally, an appraiser must be state certified to create substantiated real estate appraisals for federally-backed sales. You have the ability to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: The value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the house were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Certain methods, such as the price per square foot, are the ways appraisers use to ascertain the value of a home.
Fact: There are many varied ways that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable houses.
Myth: As houses increase their worth by a certain percentage - in a strong economy - the homes within the same neighborhood are expected to increase by the same amount.
Fact: All appreciation of worth is on an individual basis, concluded by information on relevant considerations and the data of comparable properties. It makes no difference whether the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact us
Myth: Just looking at what the property looks like on the outside gives a good idea of its worth.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by viewing the home from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given it by their lending agency.
Myth: There's no need for consumers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.
Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an report that should 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 proximity.
Myth: Appraisers are hired only to assess building values in property sales involving mortgage-lending transactions.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you get a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection. The job of the appraiser is to find an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to assess the condition of the property and its major components, then produce a report on their conclusions.