Common myths about appraising
It is required by legal agencies that a real estate appraiser is required to be state-licensed to offer appraisal reports for federally-related home purchases in California. The law allows you to receive a copy of your completed report from your lender after it has been produced. Contact Abandy & Associates Appraisal Services if you have any questions about the appraisal procedure.
Myth: Assessed value should be equal to market value.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this often 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 vicinity have not been reassessed for an prolonged period of time.
Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the home will vary.
Fact: The value of the home does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the cost of the property. This means that he will conduct business with impartiality and independence regardless for whom the appraisal is provided.
Myth: Any time market value is found, it should equal the replacement cost of the home.
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 particular house. The dollar amount demanded to reconstruct a property is what shows the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are the methods appraisers use to come to the value of a house.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to certain facilities, the condition of the property and the value of recent comparable sales. You can rely on Abandy & Associates Appraisal Services's appraisers to be honest in assessing this data.
Myth: When the economy is doing well and the cost of properties are reported to be increasing by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.
Fact: Worth appreciation of a certain house must be determined on an individualized basis, factoring in data on comparable homes and other relevant specifications within the house itself. It doesn't matter if the economy is doing well or declining.
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Myth: The home's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply viewing the house from the exterior.
Myth: Since the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. However, consumers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lender.
Fact: A consumer should definitely look through their appraisal; there could be some questions or some concerns about the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing helpful 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 proximity.
Myth: Appraisals are ordered only to assess home values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude 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: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will create a report that will express the condition of the property and its major components and possible damage.