Appraisal myths debunked
Legally, an appraiser has to be state certified to perform legitimate appraisal reports for federally-supported transactions. The law allows you to receive a copy of your completed report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: While most states support the idea that assessed value is the same as estimated market value, this often is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The appraised value of a house will be different depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: The replacement value of the property is always is on par with the market value.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under influence from any outside group to buy or sell. The dollar amount demanded to rebuild a property is what shows the replacement cost.
Myth: There are specific ways that real estate appraisers use to find the opinion of value of a property, such as the price per square foot.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses around the appreciating properties are figured to appreciate by the same amount.
Fact: All appreciation of worth is on a one-on-one basis, concluded by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Ventura County or Oak Park, CA?Contact our professional staff
Myth: Just examining what the home looks like on the outside gives a good idea of its cost.
Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived just by looking at the house from the exterior.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. However, consumers must be supplied with a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it exceeds the necessities of their lending company.
Fact: Only if home buyers read a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, comprised of helpful and often-revealing 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: 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: Ordering an appraisal can fulfill a variety of needs 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 property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection report. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. House inspectors will write a report that will explain the condition of the property and its major components and possible damage.