Appraisal myths debunked
By law, an appraiser is required to be state-licensed to offer appraisals for federally-supported purchases. The law allows you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any questions about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: It might be that California, like most states, supports the idea that the assessed value equals the market value; however, this is not often the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller may have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Market value should equal replacement cost.
Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount demanded to reconstruct a property is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are what appraisers use to determine the cost of a property.
Fact: There are many varied formulae that an appraiser will use to make a detailed investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.
Myth: As properties increase their worth by a certain percentage - in a strong economy - the properties within the same neighborhood are expected to appreciate by the same amount.
Fact: Cost appreciation of a certain house is always concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is robust or bad.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: The home's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Fact: Home value is concluded by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by inspecting the home from the outside.
Myth: Because the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers have to be provided with a version of the document through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it meets the requirements of their lending agency.
Fact: A consumer should definitely look through their appraisal; there might be some questions or some worries with the accuracy of the analysis that need to be addressed. 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, as it contains a great deal of information - including, but certainly 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: Appraisals are ordered only to assess home values in home sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and will perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. A home inspector assesses the condition of the home and its main components and reports their findings.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.