Appraisal myths debunkedLegally, an appraiser needs to be state certified to produce legitimate real estate appraisals for federally-backed purchase. Also by law, you are entitled to request a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal process. Myth: Assessed value should always equate to market value.Fact: While most states back the concept that assessed value approximates estimated market value, this usually is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are excellent examples of why this occurs. Myth: Depending on if the appraisal is written 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 and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted. Myth: Any time market value is found, it should equate to the replacement cost of the property.Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. Replacement value is the dollar amount necessary to rebuild a home in-kind. Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to come to the price of a home.Fact: There are many differing calculations that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses. Myth: As properties increase their worth by a certain percentage - in a strong economic state - the houses around the appreciating properties are figured to appreciate by the same amount.Fact: All appreciation of worth is on a case-by-case basis, determined by information on relevant conditions and the data of comparable properties. It makes no difference whether the economy is robust or poor. Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA? Contact usMyth: Just seeing what the home looks like on the outside gives an idea of its worth.Fact: House value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data needed. Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance real estate, you own the ordered appraisal.Fact: Legally, the document is owned by the lender unless the lender releases their interest in the appraisal. Home buyers must be supplied with a version of the report through request because of the Equal Credit Opportunity Act. Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lending company is satisfied.Fact: A home buyer should definitely read through their report; there might be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains a great deal of information - including, but certainly 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 area. Myth: The only reason someone would order an appraisal is if a property needs its value estimated in a lender sales transaction.Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning. Myth: An appraisal is the same as a home inspection.Fact: Appraisal reports are definitely not the same as a home inspection report. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the home and its major components and reports their findings. |