Common myths about appraising
It is required by the government that a real estate appraiser must be state-licensed to offer appraisal reports for federally-related real estate transactions in Florida. The law gives you the right to receive a copy of your completed report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: It is possible that Florida, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. There are times when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the home will vary.
Fact: The appraiser has no personal interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the methods appraisers use to come to the value of a home.
Fact: There are many different formulae 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 undesirable facilities and the opinion of value of recently sold comparable homes.
Myth: When the economy is doing well and the value of properties are found to be rising by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.
Fact: All appreciation of worth is on an individual basis, determined by data on relevant conditions and the data of comparable homes. It makes no difference whether the economy is powerful or poor.
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Myth: Just seeing what the house looks like on the outside gives an excellent idea of its value.
Fact: There are a multitude of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data necessary.
Myth: Because the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. By the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given one by their lending agency.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending agency is fine with the contents therein.
Fact: A consumer should definitely inspect their document; 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 report can double as a record for the future, containing an exorbitant amount of data - 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: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending institution.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety 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: There's no need to get an appraisal if you get a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will compose a report that will express the condition of the home and its major components and possible damage.