Common myths about appraising

Legally, an appraiser needs to be state certified to create legitimate real estate appraisals for federally-backed purchase. The law allows you to acquire a copy of your completed appraisal from your lender after it has been provided. Contact Piscitelli Appraisal Service if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser should be equivalent to the market value.

Fact: It might be that , like most states, validates the idea that the assessed value equals the market value; however, this is not always true. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: The opinion of value of a home will differ 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 outcome of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.

Myth: Any time market value is established, it should equal the replacement cost of the home.

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement value is the dollar amount necessary to rebuild a home in-kind.

Myth: Certain formulae, like the price per square foot, are what appraisers use to arrive at the cost of a house.

Fact: There are many different ways that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable homes.

Myth: When the economy is strong and the sales prices of homes are found to be rising by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.

Fact: Worth increase of a certain home is always concluded on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It doesn't matter if the economy is on the rise or declining.

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Myth: Just looking at what the property looks like on the outside gives an excellent idea of its worth.

Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the house from the outside.

Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal.

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given it by their lending company.

Myth: Consumers need not worry about what is in their report so long as it meets the requirements of their lending institution.

Fact: Only if consumers check out a copy of their report can they double-check 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 data contained in an appraisal report that can be useful to the home buyer 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 area.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the cost of a property during a sales transaction involving a lender.

Fact: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: An appraisal report is no different than a home inspection report.

Fact: An appraisal does not serve the same purpose as an inspection report. An appraiser forms an opinion of value in the appraisal process and resulting appraisal. A home inspector determines the condition of the property and its main components and reports their findings.