Appraisal myths debunked
It is required by law that a real estate appraiser needs to be state-licensed to produce appraisals for federally-supported property purchases in Alabama. The law gives you the right to receive a copy of your finished report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this often is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: The buyer or the seller may have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a home without being under pressure from any external group to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: There are certain methods that real estate appraisers use to determine the cost of a house, like the price per square foot.
Fact: There are many differing processes that an appraiser will use to make a full analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.
Myth: As properties appreciate by a specific percentage - in a robust economy - the houses nearby are figured to appreciate by the same amount.
Fact: Worth appreciation of a specific house is always determined on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the property itself. It makes no difference if the economy is powerful or poor.
Have other questions about appraisers, appraising or real estate in Elmore County or Montgomery, AL?Contact Mike Noble Appraisals
Myth: Just looking at what the property looks like on its exterior gives an idea of its worth.
Fact: Home value is concluded by a number of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just examining the house from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal.
Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the report. However, home buyers must be provided with a copy of the appraisal 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 satisfies the requirements of their lender.
Fact: A home buyer should definitely read through their appraisal report; there might be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report that will probably 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 property needs its price assessed in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don'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 appraiser concludes on an opinion of value in the appraisal process and resulting document. House inspectors will compose a report that will determine the condition of the home and its major components and possible damage.