Appraisal myths debunked
It is required by legal agencies that a real estate appraiser needs to be state-licensed to create appraisal reports for federally-supported property transactions in Virginia. You are also entitled by law to receive a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value has to be equivocal to the assessed value of the property.
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. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: Depending on if the appraisal is drawn up 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 appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Without any influence from any external parties to purchase 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: There are certain ways that real estate appraisers use to determine the opinion of value of a property, such as the price per square foot.
Fact: Appraisers make a detailed analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: As houses increase their worth by a specific percentage - in a strong economic state - the homes nearby are expected to appreciate by the same amount.
Fact: All appreciation of worth is on a one-on-one basis, concluded by information on relevant elements and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
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Myth: The property's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Fact: There are a number of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information necessary.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their property, they legally own their appraisal report.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. However, home buyers must be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it satisfies the necessities of their lending agency.
Fact: A home buyer should definitely read through their document; there might be some questions or some concerns with the accuracy of the inspection 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 near perfect record for future reference, filled with useful 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lending company.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
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. The point of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. The point of a home inspector is to determine the condition of the home and its major components, then compose a report on these findings.