Appraisal myths debunked
It is enforced by the government that a real estate appraiser needs to be state-licensed to write appraisal reports for federally-related real estate purchases in California. You have the ability to acquire a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser should be the same as the market value.
Fact: It is possible that California, like most states, validates the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are prime examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the cost of the home will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equal replacement cost.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount necessary to rebuild a house is what shows the replacement cost.
Myth: Specific formulae, such as the price per square foot of the property, are the methods appraisers use to arrive at the price of a house.
Fact: There are many different ways that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable homes.
Myth: When the economy is doing well and the cost of homes are reported to be rising by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: Any price at which an appraiser concludes concerning a certain property is always personalized, based on certain factors concluded from the data of comparable houses and other specifications within the property itself. It makes no difference if the economy is good or on the decline.
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Myth: You can generally find what a house is worth simply by looking at the exterior.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these things can be found simply by examining the home from the outside.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance real estate, you own the ordered appraisal.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Consumers must be provided with a version of the report upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lender.
Fact: A home buyer should definitely look through their report; there will probably be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, comprised of useful and often-revealing data - 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: The only reason someone would hire an appraiser is if a home needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal. The reason behind an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to assess the condition of the property and its main components, then compose a report on these inspection.