Appraisal myths & facts
Legally, an appraiser is required to be state certified to write legitimate real estate appraisals for federally-backed purchase. You also have the right to request a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value will always be the same as to market value.
Fact: It might be that California, like most states, validates the idea that the assessed value is the same as the market value; however, this is not often the case. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the neighborhood 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 value of the property will vary.
Fact: The appraiser has no vested interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should equal the replacement cost of the property.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the worth of a home.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on WalshStreet Appraisals's appraisers to be ethical in assessing this data.
Myth: When the economy is strong and the worth of houses are reported to be rising by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: Price appreciation of a certain home is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Los Angeles, CA?Contact WalshStreet Appraisals
Myth: You can usually see what a property is worth simply by looking at the outside.
Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by examining the home from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the provided appraisal.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be given it by their lender.
Myth: There's no need for consumers to even worry about what the appraisal contains so long as their lending company is fine with the contents therein.
Fact: A consumer should definitely read through their appraisal; there may be some questions or some concerns with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal report that should 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: Appraisals are ordered only to assess real estate property values in home sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: A home inspection has a completely different purpose than an appraisal. The point of an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the report. House inspectors will create a report that will determine the condition of the property and its major components and possible damage.