Appraisal myths debunked
By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed transactions. Also by law, you are allowed to receive a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should be the same as to market value.
Fact: It could be that Alabama, like most states, validates the idea that the assessed value is the same as the market value; however, this is not always true. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The value of a property will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should be the same as the replacement cost of the house.
Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the property were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Specific methods, like the price per square foot, are the methods appraisers use to ascertain the price of a home.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the price of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: When the economy is doing well and the sales prices of homes are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: All increase of value is on a one-on-one basis, concluded by information on relevant considerations and the data of comparable homes. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Elmore County or Montgomery, AL?Contact our professional staff
Myth: You can commonly tell what a house is worth simply by looking at the outside.
Fact: There are a number of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the property from the exterior.
Myth: Since the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the report. However, consumers have to be supplied with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lender.
Fact: It is almost imperative for consumers to peruse a copy of their report 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. An appraisal report can double as a record for the future, since it contains an incredible 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: The only reason someone would hire an appraiser is if a house needs its price estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection report.
Fact: A home inspection report serves a completely different purpose than an appraisal. The job of the appraiser is to find an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will express the condition of the home and its major components and possible damage.