Appraisal myths & facts
It is enforced by law that an appraiser needs to be state-licensed to write appraisals for federally-related home purchases in California. Also by law, you are allowed to demand a copy of the finished appraisal from your lending agency. Contact Premier Appraisal of SoCal if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.
Fact: It could be that California, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not always true. There are times when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the Mission Viejo have not been reassessed for a good length of time, it may vary wildly.
Myth: The appraised value of a home will vary depending upon if the appraisal is produced for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: Any time market value is found, it should be similar to the replacement cost of the property.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a home.
Fact: There are many differing ways that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable houses.
Myth: In a robust economy - when the sales prices of homes in a given area are reported to be increasing by a certain percentage - the worth of individual homes in the proximity can be expected to appreciate by that same percentage.
Fact: Any price at which an appraiser arrives concerning a certain property is always individualized, based on certain factors found from the data of comparable houses and other specifications within the home itself. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact Premier Appraisal of SoCal
Myth: The property's exterior is determinate of the actual worth of the house; there is no need to do an interior appraisal.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information necessary.
Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. Consumers have to be supplied with a version of the document through request as per 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 needs of their lending company.
Fact: A consumer should definitely read through their appraisal report; there might be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal report that can be useful to the consumer in the future, such as 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 region.
Myth: Appraisers are hired only to estimate home values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide 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: An appraisal is no different than a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. The reason behind an appraisal is to arrive at 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 home and its major components, then create a report on these conclusions.