Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported sales. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal procedure.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: While most states back the concept that assessed value approximates estimated market value, this commonly is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller sometimes may have impact in the value of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under duress to buy or sell. If the house were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to come to the cost of a house.
Fact: There are many differing ways that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.
Myth: In a robust economy - when the sales prices of houses in a given county are reported to be rising by a certain percentage - the prices of individual properties in the area can be expected to increase by that same percentage.
Fact: All appreciation of price is on a case-by-case basis, concluded by data on relevant considerations and the data of comparable houses. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Kootenai County or Coeur D Alene, ID?Contact Anderson Appraisals
Myth: You can commonly find what a home is worth simply by looking at the exterior.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from just looking at the house from the outside.
Myth: Since the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lender.
Myth: Consumers need not be concerned with what is in their appraisal so long as it exceeds the necessities of their lending agency.
Fact: A consumer should definitely read through their report; there could be some questions or some worries with 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. Also, the appraisal report makes an invaluable record for future reference, containing 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely 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. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.