Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to perform substantiated real estate appraisals for federally-related sales. Also by law, you are allowed to receive a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why this occurs.
Myth: The appraised value of a property will change depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The price of the house does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the value of the home. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is provided.
Myth: The replacement value of the property should be is on par with the market value.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: There are certain methods that real estate appraisers use to determine the cost of a house, such as the price per square foot.
Fact: Appraisers make an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: In a strong economy - when the costs of homes in a given area are found to be appreciating by a certain percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Price increase of a certain home is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements. 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 our professional staff
Myth: The home's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.
Fact: There are a number of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by looking at the house from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. However, consumers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the necessities of their lender.
Fact: Only if consumers check out a copy of their appraisal can they double-check 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 appraisal report makes a valuable record for future reference, containing helpful 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: The only reason someone would hire an appraiser is if a property needs its cost assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of requirements 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 nothing like a home inspection report. The job of the appraiser is to find an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to approximate the condition of the home and its major components, then write a report on their inspection.