Appraisal myths debunked
It is required by legal agencies that a real estate appraiser must be state-licensed to offer appraisals for federally-related property sales in Maryland. Also by law, you have the right to demand a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser must be the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why the price can vary.
Myth: The value of a home will change depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The opinion of value of the home does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the cost of the property. What this means is he will render task with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Market value should equal replacement cost.
Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount required to rebuild a house is what constitutes the replacement cost.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to come to the cost of a house.
Fact: There are many different processes that an appraiser will use to make a full investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable houses.
Myth: As properties increase their worth by a certain percentage - in a robust economy - the homes in proximity are figured to appreciate by the same amount.
Fact: All increase of price is on a case-by-case basis, determined by information on relevant considerations and the data of comparable properties. It makes no difference whether the economy is excellent or bad.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact us
Myth: Just seeing what the home looks like on the outside gives an excellent idea of its value.
Fact: House worth is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by looking at the home from the outside.
Myth: Considering that the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. Consumers must be given a version of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lender.
Fact: A consumer should definitely look through their report; there might be some questions or some worries with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, containing 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its worth assessed in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is the same as a home inspection report.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. The job of a home inspector is to find the condition of the house and its main components, then provide a report on their conclusions.