Common myths about appraising
It is enforced by legal agencies that a real estate appraiser must be state-licensed to perform appraisal reports for federally-related real estate transactions in Alabama. You also have the right to demand a copy of the completed report from your lending agency. Contact Mike Noble Appraisals if you have any concerns about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: It might be that Alabama, like most states, supports the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The opinion of value of a home will be different depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The value of the home does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the opinion of value of the property. Obviously, he will complete his services with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under influence from any external party to buy or sell. The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to arrive at the cost of a property.
Fact: Appraisers complete a full analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: When the economy is on the rise and the value of houses are reported to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Price appreciation of a specific home must be determined on a case-by-case basis, factoring in information on comparable homes and other relevant considerations. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Elmore County or Montgomery, AL?Contact Mike Noble Appraisals
Myth: You can usually tell what a property is worth simply by looking at the outside.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information necessary.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be provided with 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: It is very important for home buyers to read a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal report that can be useful to the consumer 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 order an appraisal is if a home needs its value estimated in a lender sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but certainly 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: An appraisal does not fulfill the same purpose as an inspection report. The purpose of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the report. The task of a home inspector is to assess the condition of the house and its main components, then create a report on these inspection.