Appraisal myths debunked
Legally, an appraiser has to be state certified to produce substantiated real estate appraisals for federally-supported sales. The law gives you the right to receive a copy of your completed appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser should be equivalent to the market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are exact examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under duress from any outside group to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: There are certain ways that real estate appraisers use to determine the cost of a home, like the price per square foot.
Fact: There are many numerous processes that an appraiser will use to make a comprehensive analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable homes.
Myth: As homes increase their worth by a specific percentage - in a strong economic state - the houses around the appreciating properties are expected to increase by the same amount.
Fact: Any cost at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors pulled from the data of comparable houses and other specifications within the property itself. It makes no difference if the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in San Bernardino County or Chino Hills, CA?Contact us
Myth: The home's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior appraisal.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information required.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their home, they legally own their appraisal.
Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Consumers must be supplied with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: There's no point 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: A consumer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the report 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 a near perfect record for future reference, filled with helpful and often-revealing information - 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: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal report. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will write a report that will show the condition of the house and its major components and possible damage.