Appraisal myths & facts
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed purchases. You are also entitled by law to receive a copy of the finished appraisal from your lender. Contact WalshStreet Appraisals if you have any questions about the appraisal procedure.
Myth: Market value needs to be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. At times when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the opinion of value of the property will vary.
Fact: The price of the property does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the value of the property. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is provided.
Myth: The replacement cost of the house is always is on par with the market value.
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 dollar amount required to reconstruct a house is what shows the replacement cost.
Myth: Specific methods, like the price per square foot, are what appraisers use to ascertain the worth of a house.
Fact: Appraisers make a full analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As properties increase their worth by a specific percentage - in a robust economic state - the properties nearby are expected to increase by the same amount.
Fact: Any price at which an appraiser arrives concerning a particular house is always individualized, based on certain factors pulled from the information of comparable houses and other considerations within the property itself. It makes no difference whether the economy is strong or on the decline.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Los Angeles, CA?Contact WalshStreet Appraisals
Myth: The home's exterior is determinate of the actual price of the house; there is no need to do an interior inspection.
Fact: To find an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be derived simply by looking at the home from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal report.
Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the appraisal. However, consumers have to be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lending company.
Fact: It is almost imperative for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an report that can be useful to the consumer 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a property needs its worth estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and will perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you order a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the building and its major components and reports these findings.