Appraisal myths debunked
By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported transactions. The law gives you the right to get a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Fact: It could be that California, like most states, validates the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the Los Angeles have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the property will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any outside group to buy or sell. The dollar amount needed to reconstruct a home is what shows the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to arrive at the price of a house.
Fact: An appraisal is an amalgamation of data concluded from the house's size, location, proximity to undesirable facilities, the condition of the house and the worth of recent comparable sales. You can rely on WalshStreet Appraisals's appraisers to be honest in assessing this information.
Myth: When the economy is doing well and the cost of properties are reported to be increasing by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.
Fact: Cost appreciation of a specific home has to be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant considerations. It makes no difference whether the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Los Angeles, CA?Contact our professional staff
Myth: The home's outside is determinate of the actual price of the house; there is no need to do an interior inspection.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just viewing the house from the outside.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their home, they own their appraisal.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the report. However, home buyers must be supplied with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal report so long as it exceeds the needs of their lending company.
Fact: A home buyer should definitely look through their appraisal; there could be some questions or some worries about the accuracy of the appraisal report that need to 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 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.
Fact: Based upon their qualifications and designations, appraisers can and do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The reason behind an appraisal is to find an opinion of fair market value during the appraisal process and the production of the report. A home inspector determines the condition of the building and its main components and reports their findings.