Appraisal myths & facts
Legally, an appraiser needs to be state certified to write legitimate appraisal reports for federally-related purchase. Also by law, you are allowed to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Fact: It is probable that California, like most states, validates the common myth that the assessed value equates to the market value; however, this is not always true. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The opinion of value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The value of the property does not affect the pay of the appraiser; as a result, the appraiser has no personal interest in the opinion of value of the property. Obviously, he will render services with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any outside group to purchase or sell. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: There are certain ways that appraisers use to show the opinion of value of a home, such as the price per square foot.
Fact: An appraisal report is a collection of data based on the house's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can count on Associate Appraisers of America's appraisers to be honest in assessing this information.
Myth: In a robust economy - when the values of houses in a given region are reported to be rising by a particular percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: All appreciation of worth is on a one-on-one basis, found by information on relevant conditions and the data of comparable homes. It makes no difference if the economy is good or bad.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: The house's outside is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Fact: There are a number of different variables that determine property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by looking at the house from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. However, consumers have to be provided with a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending agency.
Fact: It is very important for home buyers to peruse a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, as it contains an incredible amount of data - including, but 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 area.
Myth: The only reason someone would order an appraisal is if a house needs its cost estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series 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: You don't have to get an appraisal if you get a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection. An appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will create a report that will determine the condition of the property and its major components and possible damage.
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