Common myths about appraising
By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported sales. Also by law, you are entitled to request a copy of the finished appraisal from your lending agency. Contact Amerappraise, LLC if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser should be the same as the market value.
Fact: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case. At times when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller can have leverage in the value of the home depending upon for whom the appraiser is working.
Fact: The opinion of value of the property does not affect the salary of the appraiser; as such, the appraiser has no vested interest in the opinion of value of the house. This means that he will render job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the property.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the worth of a home.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to certain facilities, the condition of the home and the cost of recent comparable sales. You can count on Amerappraise, LLC's appraisers to be honest in assessing this data.
Myth: In a powerful economy - when the costs of houses in a given region are found to be increasing by a particular percentage - the worth of individual homes in the proximity can be expected to rise by that same percentage.
Fact: All increase of value is on a case-by-case basis, determined by data on relevant considerations and the data of comparable properties. This is true in good economic times as well as bad.
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Myth: The property's outside is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.
Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by examining the house from the outside.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers must be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the needs of their lending agency.
Fact: A consumer should definitely read through their report; there could be some questions or some worries with the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an incredible amount of 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: The only reason someone would order an appraisal is if a home needs its price estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal report. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. The task of a home inspector is to determine the condition of the home and its major components, then produce a report on their conclusions.