Appraisal myths & facts
It is enforced by the government that an appraiser must be state-licensed to create appraisal reports for federally-supported property sales in California. The law gives you the right to acquire a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value should always equate to market value.
Fact: While most states back the suggestion that assessed value equates estimated market value, this often is not the case. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller can have an influence in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: Market value will 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 property. The dollar amount demanded to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the cost of a house.
Fact: Appraisers complete a detailed analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is robust and the value of homes are reported to be appreciating by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.
Fact: Any value at which an appraiser concludes concerning a particular home is always personalized, based on certain factors found from the information of comparable properties and other considerations within the home itself. It doesn't matter if the economy is on the rise or declining.
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Myth: You can commonly see what a home is worth simply by looking at the outside.
Fact: There are a multitude of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the house from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal report.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given it by their lender.
Myth: There's no point for consumers to even care about what the report contains so long as their lending agency is satisfied.
Fact: Only if consumers check out a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, filled with helpful 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 area.
Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. House inspectors will create a report that will express the condition of the property and its major components and possible damage.