Appraisal myths & facts
By law, an appraiser must be state-licensed to offer appraisals for federally-supported transactions. You are also entitled by law to receive a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: While most states uphold the idea that assessed value is equal to estimated market value, this usually is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the house will vary.
Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Market value will be the same as replacement cost.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. The replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Certain methods, like the price per square foot of the property, are the methods appraisers use to come to the worth of a home.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: As homes increase their worth by a specific percentage - in a robust economy - the properties within the same neighborhood are figured to appreciate by the same amount.
Fact: Any cost at which an appraiser concludes concerning a particular property is always individualized, based on certain factors derived from the data of comparable properties and other specifications within the house itself. This is true in excellent economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Hillsborough County or Valrico, FL?Contact us
Myth: Just seeing what the house looks like on its exterior gives an excellent idea of its value.
Fact: House worth is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by examining the property from the outside.
Myth: Since the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. However, home buyers have to be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their report so long as it meets the necessities of their lending institution.
Fact: It is a very good idea for consumers to look at a copy of their report so that they can double-check the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that could 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a lot 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: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal 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 appraisal. The point of a home inspector is to determine the condition of the home and its main components, then provide a report on their inspection.