Appraisal myths debunked
It is mandated by law that a real estate appraiser needs to be state-licensed to offer appraisal reports for federally-supported home purchases in California. You also have the right to receive a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: The buyer or the seller sometimes may have some pull in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. The replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: There are certain methods that real estate appraisers use to show the cost of a house, like the price per square foot.
Fact: There are many varied formulae that an appraiser will use to make an in-depth investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.
Myth: When the economy is doing well and the value of homes are found to be rising by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.
Fact: Any price at which an appraiser concludes concerning a specific property is always individualized, based on certain factors found from the data of comparable homes and other specifications within the home 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 Woodland Hills, CA?Contact All City Appraisal
Myth: Just seeing what the home looks like on its exterior gives a good idea of its cost.
Fact: Home value is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the information required.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your home, you own the produced appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with one by their lender.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the necessities of their lending agency.
Fact: It is very important for home buyers to go through a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of useful and often-revealing data - including 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 estimate home values in home sales involving mortgage-lending transactions.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform 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 have had a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The function of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will produce a report that will determine the condition of the property and its major components and possible damage.