Appraisal myths debunked

It is enforced by law that a real estate appraiser is required to be state-licensed to produce appraisal reports for federally-related real estate purchases in California. Also by law, you are allowed to demand a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value should be the same as to market value.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. At times when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the Mission Viejo have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller often will have an influence in the cost of the home depending upon for whom the appraiser is working.

Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.

Myth: Market value will equal replacement cost.

Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a house without being under duress from any outside party to buy or sell. Replacement value is the dollar amount necessary to rebuild a property in-kind.

Myth: Certain formulae, like the price per square foot, are the methods appraisers use to ascertain the price of a property.

Fact: There are many numerous ways that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.

Myth: As houses appreciate by a specific percentage - in a robust economic state - the homes around the appreciating properties are expected to increase by the same amount.

Fact: All increase of price is on a one-on-one basis, determined by data on relevant elements and the data of comparable properties. It makes no difference whether the economy is strong or on the decline.

Myth: You can commonly see what a home is worth simply by looking at the outside.

Fact: Home value is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by inspecting the property from the outside.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal report.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the report. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lending company.

Myth: Home buyers need not be concerned with what is in their appraisal document so long as it satisfies the needs of their lending institution.

Fact: Only if home buyers look over a copy of their appraisal 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. Also, the appraisal report makes a near perfect record for future reference, filled with helpful and often-revealing information - 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 area.