Common myths about appraising

It is enforced by the government that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related property sales in California. Also by law, you have the right to demand a copy of the completed report from your lender. Contact All City Appraisal if you have any concerns about the appraisal procedure.

Myth: Assessed value should be the same as to market value.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller may have an influence in the value of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular property, with neither being under duress to buy or sell. If the house were rebuilt, the dollar amount needed to do so would be the replacement cost.

Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to ascertain the cost of a home.

Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.

Myth: As homes increase their worth by a specific percentage - in a robust economic state - the properties in proximity are expected to increase by the same amount.

Fact: All appreciation of price is on a case-by-case basis, found by information on relevant elements and the data of comparable properties. It makes no difference whether the economy is robust or terrible.

Have other questions about appraisers, appraising or real estate in Los Angeles County or Woodland Hills, CA?

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Myth: The property's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.

Fact: Property value is concluded by a multitude 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 needed.

Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal report.

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be provided with it by their lending company.

Myth: Home buyers need not be concerned with what is in their document so long as it meets the needs of their lending agency.

Fact: Only if consumers read a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, filled with 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 vicinity.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a home during a sales transaction involving a lender.

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

Myth: A home inspection serves the same purpose as an appraisal.

Fact: Appraisal reports are definitely not the same as a home inspection report. The task of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The point of a home inspector is to approximate the condition of the property and its major components, then produce a report on their inspection.