Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. The law entitles you to get a copy of your finished appraisal from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal procedure.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why this occurs.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the house will vary.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. If the home were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to arrive at the price of a property.
Fact: An appraisal report is an assertion of information based on the house's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can rely on Associate Appraisers of America's appraisers to be professional in assessing this information.
Myth: As properties appreciate by a certain percentage - in a strong economy - the properties in proximity are expected to increase by the same amount.
Fact: Worth increase of a specific house must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the property itself. It makes no difference whether the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: The property's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Fact: Home worth is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data required.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they own their appraisal.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. However, home buyers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the necessities of their lending agency.
Fact: A consumer should definitely read through their appraisal report; there might be some questions or some worries about the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending agency.
Fact: Depending upon their qualifications and designations, appraisers can and do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: Appraisal reports are nothing like a home inspection. The task of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The point of a home inspector is to find the condition of the house and its major components, then create a report on these inspection.
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