Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to write substantiated appraisal reports for federally-supported purchase. Also by law, you have the ability to receive a copy of the finished report from your lending agency. Contact WalshStreet Appraisals if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.
Fact: While most states uphold the idea that assessed value equates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: The buyer or the seller can have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: Market value will be the same as replacement cost.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under pressure to buy or sell. If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.
Myth: There are specific methods that appraisers use to show the opinion of value of a property, such as the price per square foot.
Fact: There are many varied processes that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable homes.
Myth: When the economy is strong and the cost of homes are found to be increasing by a certain percentage, the other properties in the neighborhood can be expected to appreciate based on that same percentage.
Fact: All appreciation of value is on a case-by-case basis, found by data on relevant elements and the data of comparable homes. It makes no difference whether the economy is strong or terrible.
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Myth: You can commonly find what a property is worth simply by looking at the outside.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they own their appraisal.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. Consumers have to be supplied with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it exceeds the necessities of their lending institution.
Fact: It is very important for consumers to check over 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. There is an incredible amount of data stored in an appraisal that will probably be useful to the home buyer 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 region.
Myth: The only reason someone would order an appraisal is if a house needs its cost assessed in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely 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.
Fact: An appraisal report does not serve the same purpose as an inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.