Appraisal myths debunked
Legally, an appraiser must be state certified to create substantiated appraisal reports for federally-related purchase. You have the ability to request a copy of the completed report from your lender. Contact All City Appraisal if you have any concerns about the appraisal process.
Myth: Assessed value should be the same as to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why there might be a differential in price.
Myth: The buyer or the seller often will have an influence in the cost of the house depending upon for whom the appraiser is working.
Fact: The price of the property does not affect the pay of the appraiser; as a result, the appraiser has no personal interest in the cost of the property. What this means is he will provide task with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will equal replacement cost.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any outside party to purchase or sell. The dollar amount demanded to rebuild a property is what shows the replacement cost.
Myth: Certain formulae, like the price per square foot, are the ways appraisers use to determine the worth of a home.
Fact: There are many differing calculations that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.
Myth: As properties increase their worth by a certain percentage - in a robust economic state - the homes nearby are figured to increase by the same amount.
Fact: Price increase of a specific house has to be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the house itself. It makes no difference whether the economy is robust or bad.
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Myth: The home's exterior is determinate of the actual value of the house; it is unnecessary to do an interior appraisal.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information necessary.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they legally own their appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. However, consumers must be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lending agency is fine with the contents therein.
Fact: A consumer should definitely inspect their appraisal report; there could be some questions or some concerns about 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 an incredible amount of information contained in an appraisal report that could 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: Appraisers are hired only to estimate house values in home sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection report.
Fact: A home inspection report has a completely different purpose than an appraisal. The appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.