Appraisal myths debunked
By law, an appraiser must be state-licensed to offer appraisals for federally-related sales. The law gives you the right to acquire a copy of your completed appraisal report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: While most states back the idea that assessed value equates estimated market value, this generally is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The appraised value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Market value should be the same as replacement cost.
Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. The replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to arrive at the value of a home.
Fact: An appraisal is an assertion of data based on the home's size, location, proximity to certain facilities, the condition of the house and the price of recent comparable sales. You can rely on Associate Appraisers of America's staff to be honest in assessing this data.
Myth: As houses increase their worth by a specific percentage - in a strong economy - the houses around the appreciating properties are figured to increase by the same amount.
Fact: Any price at which an appraiser concludes concerning a certain property is always individualized, based on certain factors derived from the information of comparable properties and other specifications within the house itself. It makes no difference if the economy is powerful or terrible.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact our professional staff
Myth: The property's outside is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Fact: Home worth is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they legally own their appraisal report.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Consumers have to be provided with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the necessities of their lending company.
Fact: A home buyer should definitely read through their appraisal; there could 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. Also, the appraisal report makes an excellent record for future reference, filled with helpful and often-revealing data - including 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: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending agency.
Fact: Based upon their qualifications and designations, appraisers can and may provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal. The point of a home inspector is to assess the condition of the home and its main components, then provide a report on their conclusions.
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