Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to write legitimate real estate appraisals for federally-related purchase. You have the ability to demand a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always be equal to market value.

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 has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.

Myth: The appraised value of a home will change depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.

Myth: Market value will equate to replacement cost.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under undue influence to buy or sell. The dollar amount necessary to rebuild a property is what forms the replacement cost.

Myth: Certain formulae, such as the price per square foot, are what appraisers use to arrive at the cost of a property.

Fact: An appraisal report is an assertion of data concluded from the house's size, location, proximity to undesirable facilities, the condition of the house and the price of recent comparable sales. You can depend on Associate Appraisers of America's staff to be forthright in assessing this data.

Myth: When the economy is doing well and the value of properties are reported to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.

Fact: Any price at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors concluded from the information of comparable houses and other specifications within the property itself. This is true in good economic times as well as bad.

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Myth: Just seeing what the property looks like on its exterior gives a good idea of its worth.

Fact: House value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by inspecting the home from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal report.

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal report. However, home buyers must be provided with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lending company.

Fact: A consumer should definitely look through their appraisal report; there might be some questions or some concerns with the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, filled with useful and often-revealing information - including 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 vicinity.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending company.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: There's no reason to get an appraisal if you order a home inspection.

Fact: Appraisal reports are completely different than a home inspection. An appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will write a report that will express the condition of the home and its major components and possible damage.

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