Appraisal myths debunked
By law, an appraiser is required to be state-licensed to offer appraisals for federally-related sales. Also by law, you are entitled to request a copy of the completed appraisal from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: Assessed value should always equate to market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Generally when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the appraised value of the property will vary.
Fact: The price of the home does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the worth of the property. This means that he will render services with impartiality and independence regardless for whom the appraisal is provided.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.
Myth: There are specific methods that appraisers use to show the cost of a property, such as the price per square foot.
Fact: An appraisal report is an assertion of data based on the property's size, location, proximity to some facilities, the condition of the home and the price of recent comparable sales. You can rely on Associate Appraisers of America's appraisers to be honest in assessing this data.
Myth: As homes appreciate by a certain percentage - in a robust economy - the homes in proximity are figured to increase by the same amount.
Fact: All increase of worth is on an individual basis, determined by data on relevant conditions and the data of comparable properties. It makes no difference whether the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: Just looking at what the house looks like on the outside gives an idea of its cost.
Fact: There are a multitude of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by looking at the home from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance real estate, you own the provided appraisal report.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, home buyers must be supplied with a copy of the appraisal report 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 satisfies the requirements of their lending company.
Fact: A consumer should definitely inspect their appraisal report; there might be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, comprised of helpful and often-revealing 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 vicinity.
Myth: The only reason someone would order an appraisal is if a property needs its cost estimated in a lender sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to determine the condition of the home and its major components, then write a report on their conclusions.
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