Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-supported transactions. The law allows you to acquire a copy of your completed report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended time.
Myth: The buyer or the seller often will have impact in the value of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home is always is on par with the market value.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside party to purchase or sell. The dollar amount required to reconstruct a property is what shows the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to ascertain the worth of a home.
Fact: There are many numerous methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.
Myth: As properties appreciate by a certain percentage - in a strong economic state - the properties nearby are expected to increase by the same amount.
Fact: All appreciation of value is on a one-on-one basis, concluded by information on relevant considerations and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Los Angeles County or Los Angeles, CA?Contact our professional staff
Myth: You can often see what a house is worth simply by looking at the exterior.
Fact: Home value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just inspecting the property from the outside.
Myth: Because the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the report. Home buyers must be given a version of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it exceeds the necessities of their lending group.
Fact: A consumer should definitely look through their appraisal; there could be some questions or some concerns 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. Also, the appraisal report makes an invaluable record for future reference, filled with helpful and often-revealing information - including 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: Appraisals are ordered only to estimate real estate property values in property sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. House inspectors will create a report that will express the condition of the house and its major components and possible damage.