Common myths about appraising
It is enforced by the government that a real estate appraiser must be state-licensed to offer appraisals for federally-related real estate purchases in Delaware. Also by law, you are entitled to receive a copy of the completed report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Assessed value should always be the same as to market value.
Fact: It might be that Delaware, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not always true. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are prime examples of why there might be a differential in price.
Myth: The value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.
Fact: The value of the property does not affect the payment of the appraiser; as a result, the appraiser has no vested interest in the worth of the property. What this means is he will render services with impartiality and independence regardless for whom the appraisal is conducted.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular house, with neither being under pressure to buy or sell. The dollar amount needed to rebuild a property is what shows the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the worth of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is robust and the worth of houses are found to be rising by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.
Fact: Price increase of a certain property has to be concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference if the economy is strong or poor.
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Myth: The house's outside is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
Fact: Property worth is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance real estate, you own the produced appraisal.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lending agency is fine with the contents therein.
Fact: It is a very good idea for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the document, in case there is a 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 excellent record for future reference, comprised of helpful and often-revealing information - 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 vicinity.
Myth: Appraisals are ordered only to estimate building values in home sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. The purpose of a home inspector is to approximate the condition of the home and its major components, then produce a report on their conclusions.