Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related transactions. The law gives you the right to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always be equal to market value.

Fact: It is probable that , like most states, validates the suggestion that the assessed value equals the market value; however, this is not often the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are prime examples of why this occurs.

Myth: The buyer or the seller sometimes may have leverage in the value of the property depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement cost of the property should be is on par with the market value.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. The dollar amount demanded to rebuild a home is what constitutes the replacement cost.

Myth: There are specific ways that appraisers use to determine the cost of a home, like the price per square foot.

Fact: There are many different processes that an appraiser will use to make an in-depth investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable houses.

Myth: In a powerful economy - when the values of homes in a given neighborhood are reported to be rising by a particular percentage - the prices of individual properties in the area can be expected to increase by that same percentage.

Fact: Any cost at which an appraiser concludes concerning a particular house is always individualized, based on certain factors pulled from the data of comparable properties and other specifications within the home itself. This is true in strong economic times as well as poor.

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Myth: Just looking at what the house looks like on the outside gives an excellent idea of its worth.

Fact: House value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the home from the exterior.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance real estate, you own the provided appraisal.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, consumers must be supplied with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even care about what the appraisal contains so long as their lending company is satisfied.

Fact: It is very important for consumers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a valuable record for future reference, filled with useful 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: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a house during a sales transaction involving a lender.

Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

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. The reason behind an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. A home inspector determines the condition of the house and its major components and reports their findings.