Appraisal myths & facts
It is required by law that an appraiser needs to be state-licensed to offer appraisals for federally-related real estate transactions in . The law entitles you to acquire a copy of your completed report from your lending agency after it has been produced. Contact if you have any questions about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the house will vary.
Fact: The cost of the home does not affect the pay of the appraiser; as such, the appraiser has no vested interest in the value of the home. Obviously, he will provide task with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the property were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the value of a home.
Fact: There are many varied formulae that an appraiser will use to make a full investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable houses.
Myth: When the economy is on the rise and the cost of properties are found to be increasing by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.
Fact: Any worth at which an appraiser concludes concerning a particular property is always individualized, based on certain factors pulled from the information of comparable homes and other considerations within the home itself. This is true in fair economic times as well as bad.
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Myth: Just looking at what the home looks like on its exterior gives an idea of its worth.
Fact: Home worth is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by looking at the home from the outside.
Myth: Considering that 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: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Consumers must be supplied with a version of the report through request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it meets the needs of their lending company.
Fact: Only if home buyers look over a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, containing an exorbitant amount of data - 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its price assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no reason to get an appraisal if you get a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The purpose of an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector determines the condition of the building and its main components and reports these findings.