Appraisal myths & facts
By law, an appraiser must be state-licensed to perform appraisals for federally-supported transactions. Also by law, you have the right to demand a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value must be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the value of the property will vary.
Fact: The value of the home does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the value of the home. This means that he will conduct job with impartiality and independence regardless for whom the appraisal is created.
Myth: Any time market value is established, it should be the same as the replacement cost of the house.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to determine the cost of a home.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As properties increase their worth by a certain percentage - in a strong economy - the houses around the appreciating properties are expected to increase by the same amount.
Fact: All increase of worth is on a one-on-one basis, determined by information on relevant elements and the data of comparable houses. It makes no difference if the economy is strong or on the decline.
Have other questions about appraisers, appraising or real estate in New Castle County or Bear, DE?Contact Amerappraise, LLC
Myth: You can often find what a house is worth simply by looking at the exterior.
Fact: House worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the property from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they own their appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers have to be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.
Fact: Only if home buyers examine a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal report that will probably be useful to the home buyer in the future, such as 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and do perform a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The job of the appraiser is to find an opinion of value in the appraisal process and through writing the report. A home inspector analyzes the condition of the building and its main components and reports these findings.