Appraisal myths debunked
It is required by law that an appraiser must be state-licensed to produce appraisals for federally-related real estate transactions in Maryland. Also by law, you have the right to request a copy of the completed appraisal report from your lending agency. Contact Astute Appraisals, Inc. if you have any questions about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
Fact: While most states support the suggestion that assessed value equates estimated market value, this commonly is not the case. Sometimes when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the Columbia have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the opinion of value of the home will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render 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 house.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to rebuild a property in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a house.
Fact: An appraisal report is an amalgamation of data concluded from the property's size, location, proximity to some facilities, the condition of the home and the cost of recent comparable sales. You can rely on Astute Appraisals, Inc.'s appraisers to be professional in assessing this data.
Myth: When the economy is robust and the value of homes are found to be increasing by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.
Fact: Any worth at which an appraiser arrives concerning a particular property is always personalized, based on certain factors pulled from the information of comparable homes and other considerations within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact our professional staff
Myth: You can often see what a house is worth simply by looking at the exterior.
Fact: To find an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the information necessary.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your house, you own the produced appraisal.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. However, home buyers must be given a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.
Fact: Only if consumers look over a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an report that will probably be useful to the consumer 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: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a property during a sales transaction involving a lending company.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude 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: You don't need to get an appraisal if you get a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting report. A home inspector analyzes the condition of the property and its major components and reports their findings.