Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to produce substantiated appraisal reports for federally-backed purchase. The law allows you to acquire a copy of your finished report from your lender after it has been produced. Contact Associate Appraisers of America if you have any concerns about the appraisal procedure.

Myth: Market value must be the same as the assessed value of the property.

Fact: While most states support the suggestion that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are exact examples of why the price can vary.

Myth: Depending on whether the appraisal is written for the buyer or the seller, the opinion of value of the home will vary.

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

Myth: The replacement value of the property should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a property is what forms the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the value of a house.

Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to specific facilities, the condition of the house and the cost of recent comparable sales. You can rely on Associate Appraisers of America's staff to be honest in assessing this information.

Myth: When the economy is on the rise and the cost of properties are found 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 value at which an appraiser arrives in regards to a certain property is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the house itself. It makes no difference if the economy is robust or terrible.

Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?

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Myth: The home's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data required.

Myth: Since the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the appraisal. However, home buyers must be given a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even worry about what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: A consumer should definitely inspect their appraisal; there may be some questions or some worries about the accuracy of the report that must 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 order an appraisal unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lending company.

Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A home inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection report. The purpose of the appraiser is to form an opinion of value in the appraisal process and through writing the report. House inspectors will produce a report that will determine the condition of the home and its major components and possible damage.

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