Appraisal myths & facts
By law, an appraiser must be state-licensed to perform appraisals for federally-related sales. Also by law, you have the ability to demand a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be similar to to market value.
Fact: While most states support the concept that assessed value is equal to estimated market value, this often is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are perfect examples of why the price can vary.
Myth: The buyer or the seller sometimes may have impact in the cost of the house depending upon for whom the appraiser is working.
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: Any time market value is established, it should equal the replacement cost of the house.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. Replacement cost is the dollar amount needed to rebuild a property in-kind.
Myth: There are specific ways that real estate appraisers use to find the opinion of value of a house, like the price per square foot.
Fact: An appraisal is an amalgamation of information concluded from the home's size, location, proximity to specific facilities, the condition of the house and the price of recent comparable sales. You can count on Associate Appraisers of America's appraisers to be forthright in assessing this information.
Myth: As houses appreciate by a specific percentage - in a strong economy - the houses nearby are expected to increase by the same amount.
Fact: All appreciation of price is on a one-on-one basis, determined by data on relevant conditions and the data of comparable homes. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact our professional staff
Myth: You can often see what a home is worth simply by looking at the exterior.
Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data needed.
Myth: Since the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, consumers have to be provided with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the necessities of their lending agency.
Fact: Only if home buyers check out a copy of their appraisal 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 great deal of information stored in an appraisal 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 area.
Myth: The only reason someone would hire an appraiser is if a property needs its price assessed in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and do provide a series of 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. The purpose of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will create a report that will explain the condition of the home and its major components and possible damage.
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