Common myths about appraising
It is required by law that a real estate appraiser must be state-licensed to produce appraisals for federally-related home transactions in Florida. Also by law, you are allowed to demand a copy of the completed report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this generally is not the case. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why the price can vary.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the appraised value of the house will vary.
Fact: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equal replacement cost.
Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The replacement cost is the dollar amount necessary to reconstruct a home in-kind.
Myth: There are certain methods that real estate appraisers use to determine the opinion of value of a property, like the price per square foot.
Fact: There are many different ways that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable properties.
Myth: When the economy is doing well and the value of homes are found to be rising by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.
Fact: Value increase of a certain home has to be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications 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 Okaloosa County or Destin, FL?Contact Appraisal House, Inc.
Myth: The home's outside is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Fact: Property worth is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by examining the house from the exterior.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. By the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with one by their lending company.
Myth: Consumers need not care about what is in their appraisal report so long as it satisfies the requirements of their lending group.
Fact: A consumer should definitely inspect their appraisal; there could be some questions or some concerns with the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal that should be useful to the consumer 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 region.
Myth: Appraisals are ordered only to estimate real estate property values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. The function of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.