Appraisal myths & facts

By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed purchases. You have the ability to acquire a copy of the completed report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be similar to to market value.

Fact: While most states uphold the idea that assessed value equates estimated market value, this generally is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the cost of the property will vary.

Fact: The opinion of value of the home does not affect the payment of the appraiser; due to this, the appraiser has no personal interest in the worth of the house. What this means is he will render job with impartiality and objectivity regardless for whom the appraisal is created.

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

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount necessary to rebuild a property is what constitutes the replacement cost.

Myth: Specific methods, like the price per square foot, are the ways appraisers use to arrive at the cost of a house.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: As houses increase their worth by a certain percentage - in a robust economy - the homes nearby are figured to increase by the same amount.

Fact: All appreciation of price is on an individual basis, found by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.

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Myth: The property's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information needed.

Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your house, you own the produced appraisal.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. Consumers have to be given a version of the report upon written request because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the requirements of their lending agency.

Fact: A home buyer should definitely look through their appraisal report; there might be some questions or some worries about 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 an invaluable 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 area.

Myth: Appraisals are ordered 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 perform a variety 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 get a home inspection.

Fact: A home inspection serves a completely different purpose than an appraisal report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. The task of a home inspector is to determine the condition of the property and its main components, then provide a report on these inspection.