Appraisal myths debunked
By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported purchases. You also have the right to receive a copy of the completed report from your lending agency. Contact All City Appraisal if you have any questions about the appraisal procedure.
Myth: Assessed value should always be equal to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller can have some pull in the value of the property depending upon for whom the appraiser is working.
Fact: The value of the property does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the worth of the home. What this means is he will provide business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: The replacement value of the home should be is on par with the market value.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a property is what constitutes the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the worth of a property.
Fact: There are many varied formulae that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable homes.
Myth: As properties increase their worth by a specific percentage - in a robust economic state - the homes around the appreciating properties are expected to increase by the same amount.
Fact: Any value at which an appraiser arrives in regards to a certain house is always personalized, based on certain factors concluded from the information of comparable houses and other considerations within the house itself. This is true in strong economic times as well as bad.
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Myth: Just examining what the house looks like on the outside gives an excellent idea of its cost.
Fact: Property worth is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data needed.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, home buyers have to be given a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it meets the necessities of their lending institution.
Fact: A home buyer should definitely read through their appraisal; there will probably be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of helpful and often-revealing information - 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: Appraisers are hired only to estimate building values in house sales involving mortgage-lending transactions.
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: There's no need to get an appraisal if you order a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The job of the appraiser is to form an opinion of value in the appraisal process and through creating the report. The job of a home inspector is to determine the condition of the property and its main components, then write a report on these findings.