Common myths about appraising
Legally, an appraiser is required to be state certified to write substantiated real estate appraisals for federally-related sales. The law gives you the right to get a copy of your finished appraisal from your lender after it has been provided. Contact Astute Appraisals, Inc. if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Fact: While most states support the idea that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended time.
Myth: The appraised value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The price of the house does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the cost of the home. What this means is he will complete his job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is found, it should equate to the replacement cost of the property.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount needed to reconstruct a house is what forms the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to come to the value of a property.
Fact: There are many varied processes that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable homes.
Myth: As homes increase their worth by a specific percentage - in a strong economy - the houses around the appreciating properties are figured to appreciate by the same amount.
Fact: Any value at which an appraiser concludes concerning a certain house is always individualized, based on certain factors derived from the information of comparable properties and other considerations within the house itself. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact Astute Appraisals, Inc.
Myth: The house's outside is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
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 outside-only inspection certainly can't provide all of the data required.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their property, they own their appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with one by their lending agency.
Myth: There's no need for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely read through their appraisal; there will probably be some questions or some concerns with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, comprised of useful 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: Appraisals are ordered only to assess home values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform 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: There's no need to get an appraisal if you get a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the house and its main components and reports their findings.