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Common myths about appraising

It is enforced by law that an appraiser is required to be state-licensed to perform appraisals for federally-supported property purchases in Florida. You also have the right to demand a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should equate to market value.

Fact: While most states uphold the suggestion that assessed value is equal to 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 homes are prime examples of why this occurs.

Myth: The value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.

Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.

Myth: The replacement cost of the home is always is on par with the market value.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. The dollar amount required to reconstruct a house is what shows the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to come to the cost of a property.

Fact: There are many varied ways 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 certain facilities and the cost of recently sold comparable properties.

Myth: When the economy is robust and the cost of houses are reported to be appreciating by a certain percentage, the other properties in the vicinity can be expected to rise based on that same percentage.

Fact: Cost appreciation of a specific property is always determined on an individualized basis, factoring in information on comparable houses and other relevant considerations. This is true in good economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Okaloosa County or Destin, FL?

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

Fact: Home value is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data required.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they own their appraisal.

Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. Consumers have to be provided with a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal so long as it meets the requirements of their lending institution.

Fact: A home buyer should definitely inspect their appraisal report; there might be some questions or some concerns about the accuracy of the appraisal report 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 stored in an appraisal that will probably 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 house needs its price assessed in a lender sales transaction.

Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal report is no different than a home inspection report.

Fact: Appraisal reports have almost nothing in common with a home inspection. The task of the appraiser is to find an opinion of value in the appraisal process and through writing the report. The point of a home inspector is to find the condition of the property and its major components, then write a report on these conclusions.