Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed sales. The law gives you the right to get a copy of your finished appraisal report from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: It is possible that California, like most states, validates the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are perfect examples of why there might be a differential in price.
Myth: The buyer or the seller often will have an influence in the value of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the cost of a house, such as the price per square foot.
Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to certain facilities, the condition of the home and the worth of recent comparable sales. You can rely on Associate Appraisers of America's staff to be honest in assessing this information.
Myth: As homes increase their worth by a certain percentage - in a robust economic state - the homes within the same neighborhood are figured to appreciate by the same amount.
Fact: Cost appreciation of a certain property must be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant elements. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact us
Myth: You can generally tell what a house is worth simply by looking at the outside.
Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be derived simply by examining the property from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they legally own their appraisal report.
Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with one by their lending agency.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it exceeds the needs of their lending institution.
Fact: Only if consumers look at a copy of their appraisal 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 appraisal can double as a record for the future, since 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the cost of a home during a sales transaction involving a lending company.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a series 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: There's no reason to get an appraisal if you have had 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. House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.
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.