Appraisal myths & facts
It is enforced by the government that an appraiser must be state-licensed to create appraisal reports for federally-related home transactions in Delaware. The law allows you to get a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value generally will be equal to market value.
Fact: It might be that Delaware, like most states, supports the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the home will vary.
Fact: The cost of the home does not affect the payment of the appraiser; due to this, the appraiser has no preconceived interest in the cost of the house. This means that he will complete his business with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the property were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a house.
Fact: There are many numerous calculations that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.
Myth: In a strong economy - when the costs of homes in a given county are found to be appreciating by a particular percentage - the values of individual houses in the proximity can be expected to increase by that same percentage.
Fact: Any value at which an appraiser arrives concerning a particular house is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in New Castle County or Bear, DE?Contact Amerappraise, LLC
Myth: Just seeing what the property looks like on its exterior gives an excellent idea of its worth.
Fact: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just inspecting the home from the exterior.
Myth: Since the consumer is the one who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given it by their lender.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lender.
Fact: A consumer should definitely inspect their document; there will probably be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report that can 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending company.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the property and its major components and reports their findings.