Appraisal myths & facts
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed sales. Also by law, you are entitled to receive a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are prime examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the appraised value of the property will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: Market value should equal replacement cost.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home. The replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the worth of a house.
Fact: There are many differing ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.
Myth: In a strong economy - when the worth of properties in a given neighborhood are reported to be rising by a particular percentage - the costs of individual homes in the proximity can be expected to appreciate by that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a specific house is always personalized, based on certain factors found from the information of comparable houses and other specifications within the house itself. It makes no difference whether the economy is excellent or on the decline.
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 home looks like on the outside gives an idea of its value.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data needed.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the report. However, home buyers have to be given a copy of the appraisal report upon written request, under 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: A home buyer should definitely read through their report; there might be some questions or some worries with the accuracy of the appraisal that should be addressed. 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, containing a great deal of information - 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the cost of a property during a sales transaction involving a lending company.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude 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: There's no reason to get an appraisal if you get a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The purpose of an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the report. A home inspector analyzes the condition of the property and its major components and reports these findings.