Appraisal myths & facts
It is enforced by legal agencies that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related home sales in California. You have the ability to request a copy of the completed appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Fact: This is not often the case; most states do support the idea 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 homes in the Woodland Hills have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller will have some pull 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 outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Market value should be the same as replacement cost.
Fact: Market value is found by 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 dollar amount demanded to rebuild a property is what shows the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the value of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: When the economy is strong and the sales prices of homes are found to be appreciating by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser concludes in regards to a specific home is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the property itself. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Woodland Hills, CA?Contact us
Myth: Just examining what the property looks like on its exterior gives an excellent idea of its worth.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these things can be derived just by inspecting the home from the outside.
Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Consumers have to be supplied with a copy of the report through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it exceeds the needs of their lending group.
Fact: A consumer should definitely inspect their appraisal report; there will probably be some questions or some concerns with the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing a great deal of information - including, but not limited to 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a property during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal report. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector determines the condition of the building and its major components and reports their findings.