Appraisal myths & facts
It is enforced by the government that an appraiser must be state-licensed to create appraisal reports for federally-related property sales in California. Also by law, you have the ability to request a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be equivalent to the market value.
Fact: While most states support the suggestion that assessed value equates estimated market value, this often is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The buyer or the seller can have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: Market value will equal replacement cost.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a certain home, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to determine the cost of a property.
Fact: An appraisal is an assertion of information based on the home's size, location, proximity to undesirable facilities, the condition of the house and the worth of recent comparable sales. You can depend on WalshStreet Appraisals's appraisers to be ethical in assessing this information.
Myth: In a robust economy - when the sales prices of homes in a given region are reported to be appreciating by a particular percentage - the costs of individual homes in the proximity can be expected to appreciate by that same percentage.
Fact: Any price at which an appraiser arrives in regards to a certain property is always personalized, based on certain factors found from the data of comparable properties and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Los Angeles, CA?Contact us
Myth: The house's outside is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Fact: House value is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given it by their lending company.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the requirements of their lending company.
Fact: Only if home buyers look over a copy of their appraisal 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 report can double as a record for the future, containing an incredible amount of information - 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the worth of a property during a sales transaction involving a lender.
Fact: Depending upon their qualifications and designations, appraisers can and do perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: A home inspection serves a completely different purpose than an appraisal report. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. House inspectors will write a report that will explain the condition of the house and its major components and possible damage.