Common myths about appraising
By law, an appraiser must be state-licensed to offer appraisals for federally-supported transactions. The law gives you the right to get a copy of your completed appraisal from your lending agency after it has been produced. Contact Associate Appraisers of America if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: It is probable that California, like most states, supports the idea that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: The opinion of value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the house were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to come to the cost of a house.
Fact: An appraisal is an assertion of information concluded from the property's size, location, proximity to some facilities, the condition of the house and the cost of recent comparable sales. You can depend on Associate Appraisers of America's staff to be professional in assessing this data.
Myth: When the economy is robust and the worth of homes are found to be increasing by a certain percentage, the other houses in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Any price at which an appraiser arrives concerning a particular home is always individualized, based on certain factors found from the data of comparable houses and other specifications within the home itself. It makes no difference if the economy is robust or on the decline.
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Myth: The home's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.
Fact: To find an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be found just by inspecting the house from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the provided appraisal.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. Home buyers must be provided with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lender.
Fact: It is almost imperative for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an report that can be useful to the consumer 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 region.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a property during a sales transaction involving a lending company.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude 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: There's no reason to get an appraisal if you get a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal. The job of the appraiser is to form an opinion of value in the appraisal process and through writing the report. The point of a home inspector is to assess the condition of the home and its major components, then create a report on these conclusions.
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