Common myths about appraising
It is mandated by legal agencies that an appraiser must be state-licensed to perform appraisals for federally-related home transactions in California. You also have the right to acquire a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are perfect examples of why this occurs.
Myth: The appraised value of a property will change depending upon whether the appraisal is provided for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Market value should approximate replacement cost.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under duress from any external group to buy or sell. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a house.
Fact: An appraisal report is an amalgamation of data based on the house's size, location, proximity to specific facilities, the condition of the property and the worth of recent comparable sales. You can count on Abandy & Associates Appraisal Services's appraisers to be forthright in assessing this information.
Myth: In a strong economy - when the prices of houses in a given county are reported to be appreciating by a particular percentage - the costs of individual houses in the area can be expected to increase by that same percentage.
Fact: Worth increase of a certain house is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in San Bernardino County or Chino Hills, CA?Contact Abandy & Associates Appraisal Services
Myth: The home's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on area, 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 puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. However, home buyers have to be supplied with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even care about what the appraisal report contains so long as their lending institution is fine with the contents therein.
Fact: It is a very good idea for consumers to peruse a copy of their appraisal report so that they can double-check 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. There is a wealth of data stored in an appraisal 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 proximity.
Myth: Appraisers are hired only to estimate building values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but definitely 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.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The purpose of the appraiser is to form an opinion of value in the appraisal process and through creating the report. A home inspector determines the condition of the house and its major components and reports these findings.