Common myths about appraising
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed transactions. You also have the right to acquire a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value generally will be equal to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the house will vary.
Fact: The price of the home does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the value of the property. What this means is he will conduct job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount needed to reconstruct a property is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the worth of a home.
Fact: There are many different calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable properties.
Myth: As houses appreciate by a specific percentage - in a robust economy - the properties in proximity are figured to appreciate by the same amount.
Fact: Cost increase of a certain house must be concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations. It doesn't matter if the economy is doing well or declining.
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Myth: The property's outside is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply examining the house from the outside.
Myth: Considering that the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. However, home buyers have to be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending company.
Fact: It is very important for consumers to go through a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an exorbitant amount of information - including, but certainly 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 area.
Myth: Appraisers are hired only to assess home values in home sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you order a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the house and its major components and reports these findings.