Appraisal myths debunked

By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported purchases. The law gives you the right to get a copy of your finished appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal process.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period.

Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the property will vary.

Fact: The appraiser has no personal interest in the outcome of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside group to buy or sell. If the house were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: There are certain methods that real estate appraisers use to find the cost of a property, like the price per square foot.

Fact: An appraisal is an assertion of information based on the house'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 forthright in assessing this data.

Myth: As properties appreciate by a certain percentage - in a strong economic state - the properties in proximity are expected to increase by the same amount.

Fact: Any cost at which an appraiser concludes concerning a specific property is always individualized, based on certain factors pulled from the data of comparable properties and other considerations within the property itself. This is true in good economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Los Angeles County or Woodland Hills, CA?

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Myth: You can often find what a home is worth simply by looking at the exterior.

Fact: There are a number of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the information required.

Myth: Considering that the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be given a version of the report through request as per the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the requirements of their lending institution.

Fact: Only if consumers read a copy of their report 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. An appraisal can serve as a record for the future, containing a great deal of 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 vicinity.

Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the cost of a house during a sales transaction involving a lending agency.

Fact: Based upon their qualifications and designations, appraisers can and will perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: An appraisal report is the same as a home inspection.

Fact: Appraisal reports are nothing like a home inspection report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. A home inspector assesses the condition of the house and its main components and reports their findings.