Common myths about appraising

It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to offer appraisals for federally-related home purchases in Alabama. The law allows you to acquire a copy of your finished report from your lending agency after it has been produced. Contact Mike Noble Appraisals if you have any questions about the appraisal procedure.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: It could be that Alabama, like most states, validates the suggestion that the assessed value equals the market value; however, this is not often the case. Often when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller will have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should equate to replacement cost.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. If the home were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: Specific methods, such as the price per square foot, are the ways appraisers use to ascertain the value of a property.

Fact: There are many varied ways that an appraiser will use to make an in-depth investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable properties.

Myth: As homes appreciate by a specific percentage - in a strong economic state - the properties nearby are expected to appreciate by the same amount.

Fact: Any value at which an appraiser concludes in regards to a specific home is always individualized, based on certain factors concluded from the information of comparable homes and other considerations within the property itself. It makes no difference whether the economy is robust or poor.

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Myth: You can usually tell what a home is worth simply by looking at the exterior.

Fact: There are a number of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by viewing the house from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your house, you own the produced appraisal.

Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the document. Home buyers have to be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

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

Fact: It is very important for consumers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, filled with useful and often-revealing data - including, but 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 vicinity.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.

Fact: Appraisers can have many varied 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 house inspection serves the same purpose as an appraisal.

Fact: Appraisal reports have almost nothing in common with a home inspection report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.