Appraisal myths debunked
By law, an appraiser must be state-licensed to produce appraisals for federally-backed transactions. Also by law, you are allowed to demand a copy of the completed appraisal report from your lending agency. Contact Piscitelli Appraisal Service if you have any concerns about the appraisal procedure.
Myth: Market value needs to be similar to the assessed value of the property.
Fact: It could be that California, like most states, supports the idea that the assessed value is the same as the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: The value of a home will vary depending upon whether the appraisal is produced for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Market value should equate to replacement cost.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under duress to buy or sell. If the home were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to ascertain the price of a home.
Fact: There are many differing formulae that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.
Myth: In a strong economy - when the sales prices of homes in a given area are reported to be increasing by a certain percentage - the worth of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Worth increase of a certain house is always determined on an individualized basis, factoring in data on comparable homes and other relevant specifications within the home itself. It makes no difference whether the economy is excellent or bad.
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Myth: You can commonly find what a house is worth simply by looking at the outside.
Fact: Home value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data necessary.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the provided appraisal report.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Consumers must be supplied with a copy of the report through request due to 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: A home buyer should definitely inspect their document; there may be some questions or some concerns with the accuracy of the appraisal that need to be addressed. 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 useful and often-revealing data - 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 assessment of the worth of a property during a sales transaction involving a lending agency.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal 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 have almost nothing in common with a home inspection report. The appraiser finds an opinion of value in the appraisal process and resulting appraisal report. The task of a home inspector is to assess the condition of the property and its main components, then write a report on these findings.