Appraisal myths debunked
Legally, a real estate appraiser needs to be state certified to create substantiated appraisal reports for federally-related transactions. The law gives you the right to receive a copy of your finished appraisal 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 assessed by the appraiser will be 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. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged period of time.
Myth: The opinion of value of a house will be different depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The cost of the property does not affect the payment of the appraiser; as such, the appraiser has no vested interest in the cost of the property. Obviously, he will conduct business with impartiality and objectivity regardless for whom the appraisal is created.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a property.
Fact: Appraisers complete a full analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: In a strong economy - when the values of properties in a given county are found to be increasing by a particular percentage - the worth of individual properties in the area can be expected to rise by that same percentage.
Fact: Worth increase of a certain house must be determined on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the property itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Elmore County or Montgomery, AL?Contact Mike Noble Appraisals
Myth: The house's outside is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply viewing the property from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with one by their lending agency.
Myth: Consumers need not care about what is in their appraisal so long as it exceeds the needs of their lending institution.
Fact: A home buyer should definitely read through their document; there will probably be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a property during a sales transaction involving a lending institution.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The task of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. The point of a home inspector is to approximate the condition of the property and its main components, then write a report on these inspection.