Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-backed sales. You also have the right to demand a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
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. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the value of the home will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: The replacement cost of the property is always is on par with the market value.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. If the house were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are the methods appraisers use to determine the cost of a house.
Fact: An appraisal report is an assertion of information based on the property's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can count on Associate Appraisers of America's staff to be honest in assessing this information.
Myth: When the economy is doing well and the cost of houses are reported to be rising by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.
Fact: All increase of worth is on a case-by-case basis, found by information on relevant considerations and the data of comparable houses. This is true in excellent economic times as well as bad.
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Myth: Just seeing what the property looks like on the outside gives a good idea of its cost.
Fact: To conclude an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from simply examining the house from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. Home buyers must be supplied with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the necessities of their lender.
Fact: Only if consumers examine 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 report that can 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: 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: Based upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection. An appraiser finds an opinion of value in the appraisal process and resulting report. The task of a home inspector is to find the condition of the house and its main components, then create a report on their conclusions.
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