Appraisal myths & facts
It is enforced by law that a real estate appraiser needs to be state-licensed to create appraisals for federally-supported property sales in California. The law allows you to get a copy of your completed appraisal from your lending agency after it has been produced. Contact All City Appraisal if you have any questions about the appraisal process.
Myth: Market value will always be equivocal to the assessed value of the property.
Fact: While most states back the suggestion that assessed value approximates estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller often will have some pull in the value of the property depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: The replacement value of the home should be is on par with the market value.
Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the property were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the worth of a house.
Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on All City Appraisal's staff to be honest in assessing this data.
Myth: In a powerful economy - when the prices of houses in a given region are reported to be increasing by a certain percentage - the prices of individual homes in the proximity can be expected to increase by that same percentage.
Fact: All increase of worth is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable houses. It makes no difference whether the economy is excellent or on the decline.
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Myth: Just looking at what the house looks like on its exterior gives an idea of its worth.
Fact: House worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived simply by examining the home from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. However, consumers must be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their document so long as it meets the requirements of their lending group.
Fact: A consumer should definitely inspect their appraisal; there may be some questions or some concerns with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an report that will probably be useful to the consumer in the future, such as 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 house needs its price assessed in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but definitely 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 order a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. The reason behind an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.