Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-related purchases. The law gives you the right to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Fact: While most states uphold the suggestion that assessed value equates estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are perfect examples of why the price can vary.
Myth: The opinion of value of a house will vary depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external group to purchase or sell. The dollar amount necessary to rebuild a property is what constitutes the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the methods appraisers use to arrive at the value of a house.
Fact: An appraisal report is an amalgamation of data based on the property's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can count on All City Appraisal's staff to be honest in assessing this data.
Myth: As homes appreciate by a certain percentage - in a strong economic state - the homes nearby are expected to increase by the same amount.
Fact: Value increase of a specific home must be determined on an individualized basis, factoring in information on comparable houses and other relevant considerations. 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 looking at what the property looks like on the outside gives an excellent idea of its worth.
Fact: There are a multitude of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your home, you own the provided appraisal report.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be provided with it by their lending company.
Myth: There's no need for consumers to even worry about what the appraisal report contains so long as their lending institution is satisfied.
Fact: Only if consumers read a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with helpful and often-revealing information - 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: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many different 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: An appraisal is no different than a home inspection report.
Fact: An appraisal does not fulfill the same purpose as an inspection. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.