Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed sales. The law entitles you to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value will always equate to market value.
Fact: While most states support the concept that assessed value is equal to estimated market value, this often is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the property will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the property is always is on par with the market value.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a property without being under influence from any outside party to purchase or sell. The replacement cost is the dollar amount required to rebuild a home in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the worth of a house.
Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to some facilities, the condition of the house and the cost of recent comparable sales. You can rely on Associate Appraisers of America's appraisers to be professional in assessing this data.
Myth: When the economy is strong and the worth of houses are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.
Fact: All increase of value is on a case-by-case basis, determined by data on relevant considerations and the data of comparable properties. It makes no difference whether the economy is excellent or terrible.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: The house's exterior is determinate of the actual value of the home; there is no need to do an interior inspection.
Fact: Home value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply inspecting the home from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the document. Consumers have to be given a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the appraisal report contains so long as their lending agency is satisfied.
Fact: Only if home buyers read a copy of their report can they ensure 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 an incredible amount of information stored in an report that should be useful to the home buyer 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 property needs its price estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and do provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The point of an appraisal report is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector analyzes the condition of the house and its major components and reports these findings.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.