Appraisal myths & facts
Legally, an appraiser must be state certified to create legitimate real estate appraisals for federally-related purchase. You have the ability to demand a copy of the finished appraisal report from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: Market value should be the same as the assessed value of the property.
Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: The buyer or the seller sometimes may have impact in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Any time market value is established, it should be the same as the replacement cost of the home.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. Replacement value is the dollar amount required to reconstruct a house in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to figure out the cost of a home.
Fact: An appraisal is an assertion of information concluded from the house's size, location, proximity to undesirable facilities, the condition of the house and the price of recent comparable sales. You can count on Associate Appraisers of America's appraisers to be forthright in assessing this information.
Myth: In a strong economy - when the prices of houses in a given area are found to be rising by a certain percentage - the costs of individual houses in the area can be expected to increase by that same percentage.
Fact: All increase of worth is on an individual basis, determined by data on relevant considerations and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact our professional staff
Myth: You can generally see what a house is worth simply by looking at the outside.
Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from just looking at the home from the outside.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the document. However, consumers must be given a copy of the report upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their report so long as it exceeds the requirements of their lending company.
Fact: A consumer should definitely read through their appraisal report; there may be some questions or some worries with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an appraisal report that will probably be useful to the consumer 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 vicinity.
Myth: Appraisers are hired only to estimate real estate property values in home sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and will provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to approximate the condition of the home and its main components, then produce a report on their inspection.
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