Common myths about appraising
It is mandated by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related home transactions in California. The law gives you the right to get a copy of your finished appraisal report from your lending agency after it has been provided. Contact Associate Appraisers of America if you have any questions about the appraisal procedure.
Myth: Market value has to 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 certainly varies based on state-to-state. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.
Myth: The opinion of value of a property will vary depending upon if the appraisal is conducted for the buyer or the seller.
Fact: The value of the house does not affect the salary of the appraiser; as such, the appraiser has no vested interest in the opinion of value of the property. What this means is he will conduct job with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: The replacement value of the house is always is on par with the market value.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount required to reconstruct a property is what shows the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the cost of a house.
Fact: An appraisal is an assertion of data based on the home's size, location, proximity to undesirable facilities, the condition of the house and the cost of recent comparable sales. You can rely on Associate Appraisers of America's staff to be professional in assessing this information.
Myth: When the economy is robust and the worth of properties are reported to be rising by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.
Fact: All appreciation of worth is on an individual basis, determined by data on relevant considerations and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
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Myth: You can commonly tell what a home is worth simply by looking at the outside.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data required.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they legally own their appraisal.
Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the appraisal. However, home buyers must be supplied with a copy of the report upon written 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: It is a very good idea for consumers to check over a copy of their report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an exorbitant amount of data - including, but certainly not limited to 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 home values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will compose a report that will determine the condition of the house and its major components and possible damage.
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