Appraisal myths debunked
Legally, an appraiser is required to be state certified to perform substantiated appraisal reports for federally-backed sales. Also by law, you are entitled to request a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal process.
Myth: Market value must be similar to the assessed value of the property.
Fact: It is probable that California, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not often the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller may have an influence in the value of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should approximate replacement cost.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. Replacement value is the dollar amount required to rebuild a home in-kind.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to come to the cost of a property.
Fact: There are many different methods 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 specific facilities and the opinion of value of recently sold comparable houses.
Myth: When the economy is robust and the value of homes are found to be increasing by a certain percentage, the other homes in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Any worth at which an appraiser concludes concerning a specific house is always personalized, based on certain factors derived from the information of comparable properties and other specifications within the house itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact us
Myth: You can usually tell what a home is worth simply by looking at the outside.
Fact: Property worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data needed.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal report.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. Consumers must be given a version of the document through request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lender.
Fact: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an report that can 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the cost of a home during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you get a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection. An appraiser forms an opinion of value in the appraisal process and resulting document. A home inspector analyzes the condition of the home and its major components and reports their findings.
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