Common myths about appraising
It is enforced by law that an appraiser is required to be state-licensed to produce appraisals for federally-supported real estate sales in California. The law allows you to acquire a copy of your completed report from your lending agency after it has been produced. Contact Premier Appraisal of SoCal if you have any concerns about the appraisal process.
Myth: Market value will always be equivocal to the assessed value of the property.
Fact: While most states support the concept that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller may have some pull in the value of the home depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount required to reconstruct a property is what forms the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a property.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is on the rise and the worth of properties are reported to be increasing by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.
Fact: All increase of value is on a one-on-one basis, concluded by data on relevant conditions and the data of comparable homes. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact us
Myth: Just looking at what the house looks like on its exterior gives an excellent idea of its cost.
Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they own their appraisal.
Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given it by their lender.
Myth: Home buyers need not worry about what is in their appraisal so long as it satisfies the necessities of their lending group.
Fact: Only if home buyers look through a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal report that will probably be useful to the home buyer 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: Appraisal reports are nothing like a home inspection report. The function of an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. The point of a home inspector is to assess the condition of the property and its major components, then write a report on these findings.