Appraisal myths & facts
Legally, a real estate appraiser must be state certified to produce substantiated appraisal reports for federally-supported sales. Also by law, you have the ability to receive a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value needs to be similar to the assessed value of the property.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are prime examples of why the price can vary.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the opinion of value of the home will vary.
Fact: The value of the house does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the value of the house. Obviously, he will render services with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Any time market value is found, it should equal the replacement cost of the home.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the house were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a house.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is on the rise and the cost of homes are found to be rising by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Fact: Cost increase of a certain house is always determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is robust or poor.
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 outside is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
Fact: To find an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from simply viewing the house from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your home, you own the produced appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. However, consumers have to be provided with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lender.
Fact: Only if home buyers check out a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an exorbitant amount of data - 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: Appraisers are hired only to assess real estate property values in property sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no reason to get an appraisal if you order a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The reason behind an appraisal report is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector assesses the condition of the building and its main components and reports these 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.