Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. You are also entitled by law to request a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Fact: While most states uphold the idea that assessed value equates estimated market value, this commonly is not the case. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller sometimes may have impact in the value of the home depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Any time market value is found, it should equal the replacement cost of the house.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. The replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: There are certain ways that appraisers use to find the value of a property, like the price per square foot.
Fact: An appraisal report is a collection of data concluded from the house's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can rely on Associate Appraisers of America's staff to be ethical in assessing this information.
Myth: As properties increase their worth by a certain percentage - in a strong economic state - the homes in proximity are figured to increase by the same amount.
Fact: All increase of price is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable homes. 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 our professional staff
Myth: Just looking at what the house looks like on the outside gives an excellent idea of its value.
Fact: House value is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information required.
Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. Home buyers have to be supplied with a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the report contains so long as their lending agency is fine with the contents therein.
Fact: Only if home buyers check out a copy of their report can they double-check 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 wealth of data stored 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: The only reason someone would order an appraisal is if a property needs its value assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. House inspectors will write a report that will explain the condition of the house and its major components and possible damage.
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