Appraisal myths debunked
Legally, a real estate appraiser needs to be state certified to perform substantiated appraisal reports for federally-supported sales. You have the ability to acquire a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be the same as the market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The opinion of value of a home will be different depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The value of the home does not affect the pay of the appraiser; because of this, the appraiser has no pressured interest in the cost of the home. What this means is he will provide job with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: Any time market value is established, it should be the same as the replacement cost of the home.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount required to rebuild a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the value of a home.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: In a robust economy - when the values of properties in a given neighborhood are reported to be increasing by a certain percentage - the prices of individual homes in the area can be expected to appreciate by that same percentage.
Fact: Worth increase of a certain property must be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Woodland Hills, CA?Contact us
Myth: You can commonly tell what a house is worth simply by looking at the exterior.
Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data necessary.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency 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 lender.
Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending institution is satisfied.
Fact: It is almost imperative for home buyers to go through a copy of their appraisal so that they can double-check 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. Also, the report makes an excellent record for future reference, comprised of useful and often-revealing data - 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Fact: Based upon their qualifications and designations, appraisers can and do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection report. The reason behind an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will create a report that will express the condition of the property and its major components and possible damage.