Appraisal myths & facts

It is required by legal agencies that a real estate appraiser needs to be state-licensed to write appraisal reports for federally-related property sales in California. The law entitles you to acquire a copy of your completed appraisal report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: It is probable that California, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not often the case. At times when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The opinion of value of a property will differ depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Any time market value is found, it should be the same as the replacement cost of the home.

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. If the home were rebuilt, the dollar amount needed to do so would be the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a property.

Fact: There are many varied processes 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 specific facilities and the sales price of recently sold comparable houses.

Myth: As properties appreciate by a certain percentage - in a robust economy - the homes within the same neighborhood are figured to appreciate by the same amount.

Fact: Any cost at which an appraiser concludes concerning a certain house is always personalized, based on certain factors found from the information of comparable houses and other considerations within the home itself. It makes no difference if the economy is good or terrible.

Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?

Contact us

Myth: The property's exterior is determinate of the actual worth of the home; it is unnecessary to do an interior inspection.

Fact: Home value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by viewing the property from the exterior.

Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal report.

Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. However, home buyers have to be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their appraisal document so long as it exceeds the requirements of their lending company.

Fact: A home buyer should definitely read through their report; there will probably be some questions or some concerns with the accuracy of the report that need to be addressed. 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 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 hire an appraiser unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.

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

Myth: There's no need to get an appraisal if you get a home inspection.

Fact: Appraisal reports have almost nothing in common with a home inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. House inspectors will create a report that will show the condition of the house and its major components and possible damage.