Common myths about appraising

It is mandated by legal agencies that an appraiser is required to be state-licensed to offer appraisals for federally-related real estate sales in Alabama. The law allows you to get a copy of your finished report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser must be the same as the market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged period of time.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the property will vary.

Fact: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.

Myth: Any time market value is established, it should equate to the replacement cost of the property.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any outside group to purchase or sell. Replacement cost is the dollar amount necessary to reconstruct a home in-kind.

Myth: There are specific ways that appraisers use to determine the value of a house, like the price per square foot.

Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the property and the value of recent comparable sales. You can count on Mike Noble Appraisals's appraisers to be forthright in assessing this data.

Myth: In a strong economy - when the sales prices of properties in a given county are found to be appreciating by a particular percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: All increase of value is on a case-by-case basis, concluded by information on relevant elements and the data of comparable properties. This is true in strong economic times as well as bad.

Have other questions about appraisers, appraising or real estate in Elmore County or Montgomery, AL?

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Myth: Just seeing what the property looks like on the outside gives an excellent idea of its worth.

Fact: There are a multitude of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the property from the outside.

Myth: Because consumers pay for appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with one by their lender.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lender.

Fact: It is almost imperative for home buyers to peruse a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of useful and often-revealing information - including 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 property during a sales transaction involving a lender.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: An appraisal report is no different than a home inspection.

Fact: An appraisal report does not serve the same purpose as an inspection. The purpose of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. The point of a home inspector is to approximate the condition of the home and its main components, then provide a report on these inspection.