Common myths about appraising
By law, an appraiser must be state-licensed to produce appraisals for federally-supported sales. You have the ability to receive a copy of the finished appraisal from your lender. Contact Anderson Appraisals if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller often 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 outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equal replacement cost.
Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: Specific methods, such as the price per square foot of the property, are what appraisers use to ascertain the worth of a property.
Fact: There are many differing calculations that an appraiser will use to make a full investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.
Myth: When the economy is strong and the sales prices of homes are found to be rising by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.
Fact: Any value at which an appraiser concludes in regards to a specific property is always individualized, based on certain factors derived from the information of comparable houses and other specifications within the home itself. This is true in good economic times as well as poor.
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Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Fact: House value is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data necessary.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with one by their lending agency.
Myth: There's no reason for consumers to even worry about what the appraisal contains so long as their lending agency is satisfied.
Fact: Only if home buyers check out a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an incredible amount of information - 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending institution.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. The purpose of a home inspector is to approximate the condition of the property and its main components, then write a report on their findings.