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Common myths about appraising

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-related sales. You have the ability to receive a copy of the completed report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser will be exactly the same as the market value.

Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller may have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Any time market value is found, it should be the same as the replacement cost of the property.

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a home without being under influence from any external party to purchase or sell. Replacement value is the dollar amount required to rebuild a house in-kind.

Myth: Specific methods, like the price per square foot of the property, are what appraisers use to arrive at the worth of a house.

Fact: Appraisers complete a full analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: When the economy is strong and the worth of houses are reported to be increasing by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.

Fact: All appreciation of value is on a case-by-case basis, found by information on relevant considerations and the data of comparable homes. It makes no difference whether the economy is strong or poor.

Have other questions about appraisers, appraising or real estate in New Castle County or Bear, DE?

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Myth: You can usually tell what a property is worth simply by looking at the outside.

Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the property from the exterior.

Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal.

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with it by their lending company.

Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lending company.

Fact: A home buyer should definitely read through their appraisal; there might be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing useful and often-revealing data - including 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 hire an appraiser unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.

Fact: Depending upon their qualifications and designations, appraisers can and do provide a series of different 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.

Fact: A home inspection serves a completely different purpose than an appraisal report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. The job of a home inspector is to approximate the condition of the house and its major components, then compose a report on these inspection.