Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-related transactions. Also by law, you are entitled to receive a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value should always be similar to to market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are perfect examples of why this occurs.
Myth: The appraised value of a house will differ depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The appraised value of the property does not affect the pay of the appraiser; because of this, the appraiser has no pressured interest in the value of the home. Obviously, he will conduct services with impartiality and independence regardless for whom the appraisal is provided.
Myth: Market value should equal replacement cost.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular property, with neither being under duress to buy or sell. The dollar amount demanded to reconstruct a property is what forms the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the worth of a home.
Fact: There are many differing methods that an appraiser will use to make a full analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.
Myth: In a robust economy - when the costs of properties in a given neighborhood are reported to be increasing by a certain percentage - the worth of individual houses in the area can be expected to increase by that same percentage.
Fact: All increase of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable houses. It makes no difference if the economy is excellent or on the decline.
Have other questions about appraisers, appraising or real estate in Okaloosa County or Destin, FL?Contact our professional staff
Myth: You can often find what a property is worth simply by looking at the outside.
Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.
Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. Consumers must be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even care about what the report contains so long as their lending agency is satisfied.
Fact: It is a very good idea for consumers to read a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its accuracy. 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 that could 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 area.
Myth: The only reason someone would hire an appraiser is if a property needs its worth estimated in a lender sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety 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: An appraisal is the same as a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. A home inspector analyzes the condition of the building and its major components and reports these findings.