Appraisal myths debunked
It is enforced by law that a real estate appraiser must be state-licensed to offer appraisal reports for federally-supported property sales in California. You have the ability to acquire a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value will always be the same as the assessed value of the property.
Fact: It is probable that California, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not often the case. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are exact examples of why the price can vary.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no vested interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the value of a house.
Fact: Appraisers make a detailed analysis of all factors pertaining to the price of a house, including its location, condition, size, proximity to facilities and recent worth of comparable houses.
Myth: In a powerful economy - when the prices of houses in a given region are reported to be appreciating by a particular percentage - the costs of individual houses in the proximity can be expected to appreciate by that same percentage.
Fact: Value appreciation of a certain house is always concluded on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. This is true in strong economic times as well as poor.
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Myth: The home's exterior is determinate of the actual price of the home; there is no need to do an interior inspection.
Fact: There are a multitude of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by examining the house from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance real estate, you own the ordered appraisal report.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. However, consumers must be supplied with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it satisfies the necessities of their lending company.
Fact: It is almost imperative for home buyers to look at a copy of their report so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, comprised of 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 proximity.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series 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 the same as a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.