Appraisal myths debunked
It is enforced by legal agencies that an appraiser is required to be state-licensed to create appraisal reports for federally-related home purchases in California. The law entitles you to get a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value must be the same as the assessed value of the property.
Fact: While most states support the concept that assessed value is the same as estimated market value, this generally is not the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the property will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to rebuild a home in-kind.
Myth: There are specific ways that real estate appraisers use to find the opinion of value of a property, such as the price per square foot.
Fact: An appraisal is an amalgamation of information concluded from the home's size, location, proximity to specific facilities, the condition of the home and the worth of recent comparable sales. You can rely on Premier Appraisal of SoCal's appraisers to be ethical in assessing this information.
Myth: In a robust economy - when the sales prices of homes in a given neighborhood are reported to be rising by a particular percentage - the values of individual homes in the proximity can be expected to appreciate by that same percentage.
Fact: All increase of worth is on an individual basis, determined by data on relevant conditions and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact our professional staff
Myth: Just seeing what the property looks like on the outside gives a good idea of its worth.
Fact: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data required.
Myth: Since the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Fact: The document is, in fact, legally owned by the lending company - 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 lender.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending agency.
Fact: Only if home buyers check out a copy of their report 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. An appraisal can serve as a record for the future, since it contains a great deal 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 proximity.
Myth: Appraisers are hired only to assess home values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude 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 report does not serve the same purpose as an inspection report. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. The point of a home inspector is to approximate the condition of the house and its major components, then produce a report on these conclusions.