Appraisal myths debunked
Legally, an appraiser is required to be state certified to write substantiated real estate appraisals for federally-related sales. Also by law, you have the ability to demand a copy of the finished report from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: It could be that California, like most states, validates the common myth that the assessed value equates to the market value; however, this is not always true. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller can have impact 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 report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. Replacement value is the dollar amount needed to reconstruct a house in-kind.
Myth: Certain formulae, like the price per square foot, are what appraisers use to arrive at the cost of a property.
Fact: There are many numerous calculations that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable properties.
Myth: When the economy is strong and the value of properties are reported to be rising by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.
Fact: Any worth at which an appraiser arrives in regards to a specific house is always individualized, based on certain factors derived from the data of comparable homes and other specifications within the property itself. This is true in fair economic times as well as bad.
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Myth: The home's outside is determinate of the actual price of the property; it is unnecessary to do an interior appraisal.
Fact: There are a number of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by looking at the property from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Because of the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be provided with one by their lending agency.
Myth: There's no reason for home buyers to even care about what the appraisal report contains so long as their lending company is satisfied.
Fact: It is very important for consumers to go through a copy of their appraisal so that they can verify the accuracy of the report, 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 report can serve as a record for the future, as it contains an incredible amount of data - including, but 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you order a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.