Appraisal myths debunked
Legally, a real estate appraiser needs to be state certified to produce substantiated real estate appraisals for federally-supported purchase. The law entitles you to receive a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value should equate to market value.
Fact: While most states back the suggestion that assessed value approximates estimated market value, this often is not the case. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an prolonged period.
Myth: The buyer or the seller often will have some pull in the cost of the house depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Any time market value is found, it should be similar to the replacement cost of the house.
Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement value is the dollar amount needed to reconstruct a property in-kind.
Myth: There are certain methods that real estate appraisers use to determine the cost of a home, like the price per square foot.
Fact: There are many different methods 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 certain facilities and the cost of recently sold comparable homes.
Myth: As properties increase their worth by a certain percentage - in a strong economy - the homes in proximity are expected to appreciate by the same amount.
Fact: Any worth at which an appraiser concludes in regards to a particular house is always personalized, based on certain factors derived from the information of comparable properties and other considerations within the property itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact our professional staff
Myth: The property's outside is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.
Fact: There are a number of different factors that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by inspecting the house from the exterior.
Myth: Since the consumer is the person who provides the money 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 lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lender.
Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending agency is fine with the contents therein.
Fact: Only if consumers check out a copy of their appraisal 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 a wealth of information contained in an appraisal that can be useful to the consumer 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 proximity.
Myth: The only reason someone would order an appraisal is if a property needs its worth assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of requirements 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: You don't have to get an appraisal if you get a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser finds an opinion of value in the appraisal process and resulting document. House inspectors will produce a report that will explain the condition of the home and its major components and possible damage.