Common myths about appraising
Legally, an appraiser must be state certified to create legitimate appraisal reports for federally-supported purchase. Also by law, you are entitled to receive a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value should always equate to market value.
Fact: It is probable that California, like most states, supports the idea that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are exact examples of why the price can vary.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the house will vary.
Fact: The appraised value of the property does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the worth of the property. What this means is he will render job with impartiality and independence regardless for whom the appraisal is provided.
Myth: Any time market value is found, it should be the same as the replacement cost of the home.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under duress to buy or sell. The dollar amount required to reconstruct a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the worth of a property.
Fact: Appraisers make a detailed analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses within the same neighborhood are figured to appreciate by the same amount.
Fact: Worth appreciation of a specific home is always determined on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the property itself. It makes no difference whether the economy is excellent or poor.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact our professional staff
Myth: You can generally find what a property is worth simply by looking at the outside.
Fact: Property worth is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by looking at the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your home, you own the ordered appraisal report.
Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lending company.
Myth: There's no reason for consumers to even worry about what the appraisal report contains so long as their lending agency is fine with the contents therein.
Fact: A consumer should definitely read through their report; there will probably be some questions or some worries with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an report that could be useful to the home buyer 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 region.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The function of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector assesses the condition of the home 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.