Appraisal myths debunked
Legally, an appraiser needs to be state certified to produce legitimate real estate appraisals for federally-related sales. The law gives you the right to acquire a copy of your completed appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: It might be that California, like most states, supports the common myth that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are excellent examples of why the price can vary.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should approximate replacement cost.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. The dollar amount required to reconstruct a house is what constitutes the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are the methods appraisers use to arrive at the cost of a property.
Fact: Appraisers make a full analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: In a powerful economy - when the worth of houses in a given area are reported to be increasing by a certain percentage - the values of individual houses in the area can be expected to increase by that same percentage.
Fact: Any price at which an appraiser concludes concerning a specific home is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact us
Myth: The property's outside is determinate of the actual worth of the property; there is no need to do an interior appraisal.
Fact: House worth is determined by a number of variables, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given it by their lending company.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lending company.
Fact: Only if home buyers read a copy of their report can they ensure 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 an incredible amount of information contained in an appraisal report that could 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: The only reason someone would order an appraisal is if a house needs its cost assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are completely different than a home inspection. An appraiser finds an opinion of value in the appraisal process and resulting appraisal report. A home inspector analyzes the condition of the house and its main components and reports these findings.
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