Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related transactions. Also by law, you have the right to receive a copy of the completed report from your lending agency. Contact Piscitelli Appraisal Service if you have any concerns about the appraisal process.
Myth: Market value needs to be similar to the assessed value of the property.
Fact: It might be that California, like most states, supports the common myth that the assessed value equates to the market value; however, this is not always true. There are times when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller sometimes may have an influence in the cost of the property depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Any time market value is found, it should be similar to the replacement cost of the house.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under pressure from any outside group to purchase or sell. If the home were reconstructed, the dollar amount needed to do so would set the replacement cost.
Myth: Specific methods, like the price per square foot of the property, are what appraisers use to determine the value of a home.
Fact: An appraisal report is a collection of data based on the home's size, location, proximity to some facilities, the condition of the house and the price of recent comparable sales. You can rely on Piscitelli Appraisal Service's staff to be professional in assessing this information.
Myth: When the economy is on the rise and the cost of houses are found to be increasing by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Fact: Price increase of a specific property has to be determined on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Ventura County or Oak Park, CA?Contact Piscitelli Appraisal Service
Myth: You can often find what a house is worth simply by looking at the exterior.
Fact: To determine an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.
Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Home buyers have to be supplied with a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the needs of their lending agency.
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. An report can double as a record for the future, since it contains an exorbitant amount of data - including, but certainly 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 proximity.
Myth: Appraisers are hired only to assess house values in house sales involving mortgage-lending transactions.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection. The purpose of the appraiser is to form an opinion of value in the appraisal process and through producing the report. House inspectors will compose a report that will determine the condition of the home and its major components and possible damage.