Appraisal myths debunked
By law, an appraiser must be state-licensed to produce appraisals for federally-backed transactions. You have the ability to demand a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value should be similar to the assessed value of the property.
Fact: While most states back the idea that assessed value approximates estimated market value, this generally is not the case. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the Destin have not been reassessed for a good length of time, it may vary wildly.
Myth: The opinion of value of a home will differ depending upon whether the appraisal is produced for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Market value will equal replacement cost.
Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under influence from any outside group to buy or sell. If the house were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Certain methods, like the price per square foot, are what appraisers use to ascertain the price of a property.
Fact: There are many numerous formulae that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable homes.
Myth: In a robust economy - when the costs of houses in a given area are reported to be appreciating by a particular percentage - the values of individual homes in the area can be expected to increase by that same percentage.
Fact: All increase of price is on a one-on-one basis, determined by data on relevant conditions and the data of comparable properties. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Okaloosa County or Destin, FL?Contact our professional staff
Myth: Just examining what the home looks like on the outside gives an idea of its cost.
Fact: Home worth is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the home from the outside.
Myth: Since the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with it by their lending company.
Myth: There's no reason for consumers to even care about what the report contains so long as their lender is satisfied.
Fact: A consumer should definitely inspect their appraisal report; there could be some questions or some concerns 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. Also, the report makes a valuable record for future reference, comprised of useful and often-revealing information - 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 order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection report. The point 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. A home inspector analyzes the condition of the property and its major components and reports these findings.