Appraisal myths debunked
Legally, a real estate appraiser needs to be state certified to create substantiated real estate appraisals for federally-backed sales. You also have the right to demand a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should be similar to to market value.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The value of a property will be different depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a certain home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: There are certain methods that real estate appraisers use to find the opinion of value of a home, such as the price per square foot.
Fact: There are many different processes that an appraiser will use to make an in-depth analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable properties.
Myth: When the economy is doing well and the sales prices of properties are found to be rising by a certain percentage, the other homes in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Cost appreciation of a specific property is always concluded on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the property itself. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Sacramento County or Elk Grove, CA?Contact us
Myth: Just looking at what the house looks like on its exterior gives an idea of its worth.
Fact: There are a multitude of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by looking at the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their house, they own their appraisal.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the document. However, home buyers must be provided with a copy of the appraisal upon written request, under 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 necessities of their lender.
Fact: It is very important for home buyers to peruse a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains an exorbitant amount of data - including, but certainly not limited to 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: Appraisers are hired only to assess house values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to determine the condition of the property and its major components, then write a report on their conclusions.