Appraisal myths & facts
Legally, a real estate appraiser must be state certified to perform substantiated appraisal reports for federally-backed purchase. The law entitles you to acquire a copy of your finished report from your lending agency after it has been produced. Contact Appraisal Services of Brandon, Inc . if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this often is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller sometimes may have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The cost of the property does not affect the pay of the appraiser; because of this, the appraiser has no pressured interest in the value of the property. What this means is he will provide job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. If the property were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: There are specific ways that appraisers use to find the cost of a home, like the price per square foot.
Fact: There are many numerous processes that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable properties.
Myth: In a robust economy - when the values of houses in a given neighborhood are found to be rising by a particular percentage - the values of individual homes in the vicinity can be expected to increase by that same percentage.
Fact: Value appreciation of a certain home must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant elements. This is true in good economic times as well as bad.
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Myth: Just examining what the house looks like on the outside gives an idea of its value.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the information necessary.
Myth: Since you're the one paying for the appraisal when applying for the loan to purchase or refinance real estate, you own the provided appraisal report.
Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. However, consumers have to be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the necessities of their lending agency.
Fact: A home buyer should definitely inspect their appraisal; there may be some questions or some concerns with the accuracy of the inspection that must 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, as it contains an incredible amount of data - 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its price estimated in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide 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: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are completely different than a home inspection. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to find the condition of the house and its main components, then provide a report on these findings.