Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed transactions. Also by law, you have the ability to demand a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the house will vary.
Fact: The appraiser has no vested interest in the outcome of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will be the same as replacement cost.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under influence from any external group to purchase or sell. The dollar amount demanded to rebuild a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the worth of a house.
Fact: There are many varied ways that an appraiser will use to make a comprehensive analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable properties.
Myth: When the economy is robust and the worth of properties are found to be rising by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Fact: Worth increase of a certain home must be determined on an individualized basis, factoring in data on comparable houses and other relevant elements. It makes no difference whether the economy is excellent or on the decline.
Have other questions about appraisers, appraising or real estate in Fairfax City County or Fairfax, Virginia?Contact our professional staff
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Fact: Property value is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data necessary.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the provided appraisal report.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with one by their lender.
Myth: There's no need for consumers to even worry about what the report contains so long as their lender is satisfied.
Fact: A consumer should definitely inspect their report; there could 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 an incredible amount of information stored in an report that can 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the home and its major components and reports these findings.