Appraisal myths debunked
Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-backed sales. You are also entitled by law to acquire a copy of the completed appraisal report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Assessed value will always equate to 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. There are times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.
Myth: The opinion of value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the 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: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home. The replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the value of a house.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a strong economy - when the costs of houses in a given county are reported to be increasing by a certain percentage - the prices of individual properties in the area can be expected to rise by that same percentage.
Fact: Any price at which an appraiser arrives concerning a particular home is always personalized, based on certain factors pulled from the data of comparable houses and other specifications within the house itself. It makes no difference whether the economy is excellent or on the decline.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact Astute Appraisals, Inc.
Myth: Just looking at what the property looks like on its exterior gives an idea of its cost.
Fact: Home value is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your house, you own the ordered appraisal report.
Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. By the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given one by their lender.
Myth: It doesn't concern consumers what's in the report so long as it meets the requirements of their lending company.
Fact: It is very important for home buyers to look at a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of helpful and often-revealing data - including, but not limited to, 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: Appraisals are ordered only to assess real estate property values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide 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: You don't have to get an appraisal if you get a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The purpose of a home inspector is to find the condition of the house and its main components, then create a report on their findings.