Appraisal myths & facts
Legally, a real estate appraiser must be state certified to perform substantiated real estate appraisals for federally-backed sales. The law gives you the right to acquire a copy of your finished report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value will 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. There are times when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller may have some pull in the cost of the house depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Market value will be the same as replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under pressure to buy or sell. The dollar amount required to reconstruct a house is what forms the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the cost of a home.
Fact: Appraisers make a full analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As properties appreciate by a certain percentage - in a robust economic state - the homes in proximity are figured to appreciate by the same amount.
Fact: Any value at which an appraiser concludes in regards to a specific home is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Zellwood, FL?Contact Appraisal Advantage, Inc
Myth: Just looking at what the property looks like on the outside gives a good idea of its worth.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by examining the home from the exterior.
Myth: Considering that the consumer is the party who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be provided with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal report so long as it satisfies the requirements of their lending group.
Fact: A consumer should definitely read through their document; there may be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, comprised of helpful 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 vicinity.
Myth: Appraisals are ordered only to estimate home values in property sales involving mortgage-lending transactions.
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: There's no reason to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The point of an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. The point of a home inspector is to approximate the condition of the house and its major components, then create a report on these inspection.