Common myths about appraising
It is required by law that a real estate appraiser needs to be state-licensed to perform appraisal reports for federally-related real estate purchases in California. Also by law, you have the right to request a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value should be the same as the assessed value of the property.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged time.
Myth: The appraised value of a house will change depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The cost of the property does not affect the pay of the appraiser; as a result, the appraiser has no personal interest in the cost of the home. This means that he will conduct job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount necessary to reconstruct a property is what shows the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to arrive at the cost of a home.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: When the economy is robust and the cost of properties are reported to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Worth increase of a certain property is always concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
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Myth: The property's outside is determinate of the actual price of the house; it is unnecessary to do an interior inspection.
Fact: There are a number of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just viewing the property from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal.
Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Consumers must be given a copy of the report upon written request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it meets the necessities of their lending institution.
Fact: Only if consumers check out a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal that should 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 proximity.
Myth: Appraisals are ordered only to assess real estate property values in home sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series 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 reason to get an appraisal if you order a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. House inspectors will create a report that will express the condition of the home and its major components and possible damage.