Appraisal myths debunked
It is mandated by the government that a real estate appraiser needs to be state-licensed to produce appraisal reports for federally-related property purchases in California. You have the ability to request a copy of the finished appraisal report from your lending agency. Contact Piscitelli Appraisal Service if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: While most states back the concept that assessed value is equal to estimated market value, this commonly is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an prolonged period.
Myth: The buyer or the seller may have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the property will be is on par with the market value.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Specific methods, such as the price per square foot, are what appraisers use to arrive at the worth of a home.
Fact: An appraisal report is an assertion of information based on the house's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can depend on Piscitelli Appraisal Service's staff to be honest in assessing this data.
Myth: When the economy is robust and the worth of properties are reported to be increasing by a certain percentage, the other properties in the area can be expected to appreciate based on that same percentage.
Fact: Any worth at which an appraiser concludes concerning a specific house is always individualized, based on certain factors concluded from the information of comparable homes and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
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Myth: Just looking at what the house looks like on the outside gives an excellent idea of its value.
Fact: There are a number of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by looking at the property from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for your loan to buy or refinance real estate, you own the produced appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lending agency.
Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lending institution is fine with the contents therein.
Fact: It is very important for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with useful 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 vicinity.
Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: A home inspection report serves a completely different purpose than an appraisal. The purpose of an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal report. The purpose of a home inspector is to approximate the condition of the house and its major components, then produce a report on their conclusions.