Appraisal myths debunked
It is enforced by the government that a real estate appraiser needs to be state-licensed to perform appraisal reports for federally-supported real estate purchases in California. You have the ability to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Fact: While most states back the suggestion that assessed value is equal to estimated market value, this commonly is not the case. There are times when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the Woodland Hills have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller may have some pull in the value of the property 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 written.
Myth: The replacement cost of the house should be is on par with the market value.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under influence from any outside party to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the cost of a home.
Fact: There are many differing formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.
Myth: In a strong economy - when the prices of properties in a given region are reported to be rising by a particular percentage - the values of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: Any worth at which an appraiser concludes concerning a specific house is always individualized, based on certain factors found from the data of comparable properties and other specifications within the house itself. It makes no difference whether the economy is excellent or on the decline.
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Myth: Just seeing what the house looks like on its exterior gives an idea of its worth.
Fact: There are a number of different factors that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by inspecting the home from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they own their appraisal.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with one by their lending agency.
Myth: There's no reason for home buyers to even worry about what the appraisal contains so long as their lending institution is satisfied.
Fact: Only if consumers check out 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, containing helpful and often-revealing data - 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. A home inspector determines the condition of the house and its main components and reports these findings.