Common myths about appraising
Legally, a real estate appraiser has to be state certified to produce substantiated appraisal reports for federally-related transactions. The law allows you to acquire a copy of your completed appraisal report from your lender after it has been provided. Contact Premier Appraisal of SoCal if you have any questions about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: It is probable that California, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the appraised value of the house will vary.
Fact: The cost of the property does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the opinion of value of the home. What this means is he will complete his task with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will be the same as replacement cost.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. The dollar amount necessary to rebuild a home is what constitutes the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the cost of a property, like the price per square foot.
Fact: An appraisal report is a collection of data concluded from the home's size, location, proximity to some facilities, the condition of the house and the worth of recent comparable sales. You can count on Premier Appraisal of SoCal's appraisers to be honest in assessing this data.
Myth: As houses increase their worth by a certain percentage - in a strong economic state - the homes within the same neighborhood are expected to appreciate by the same amount.
Fact: Value appreciation of a certain property is always concluded on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It doesn't matter if the economy is on the rise or declining.
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Myth: You can generally tell what a property is worth simply by looking at the outside.
Fact: There are a number of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by looking at the house from the exterior.
Myth: Since the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the report. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lender.
Myth: Consumers need not be concerned with what is in their appraisal so long as it meets the requirements of their lending company.
Fact: It is a very good idea for consumers to read a copy of their appraisal report so that they can double-check 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. Also, the report makes a near perfect record for future reference, filled with helpful 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude 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: An appraisal does not serve the same purpose as an inspection. The purpose of an appraisal is to find an opinion of fair market value during the appraisal process and the production of the report. The job of a home inspector is to find the condition of the property and its main components, then compose a report on these findings.