Appraisal myths & facts
It is required by legal agencies that an appraiser must be state-licensed to write appraisals for federally-supported real estate purchases in California. You are also entitled by law to receive a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: It is possible that California, like most states, supports the idea that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. At times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the property will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the home.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific house, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount needed to do so would set the replacement cost.
Myth: Specific methods, such as the price per square foot, are the methods appraisers use to arrive at the value of a house.
Fact: Appraisers make a detailed analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is on the rise and the worth of homes are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: All increase of value is on a one-on-one basis, found by data on relevant elements and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Woodland Hills, CA?Contact All City Appraisal
Myth: The home's outside is determinate of the actual worth of the home; there is no need to do an interior inspection.
Fact: House worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the document. Consumers must be supplied with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the needs of their lending agency.
Fact: A consumer should definitely look through their appraisal; there may be some questions or some concerns with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal 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: There is no reason to order an appraisal unless you are trying to get an assessment of the worth of a property during a sales transaction involving a lender.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no reason to get an appraisal if you order a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. An appraiser finds an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the house and its main components and reports these findings.