Appraisal myths & facts
It is required by the government that an appraiser must be state-licensed to create appraisals for federally-supported real estate transactions in Maryland. Also by law, you have the right to request a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.
Fact: While most states back the suggestion that assessed value equates estimated market value, this usually is not the case. Often when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the Fredrick have not been reassessed for years or more, it may vary wildly.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the opinion of value of the house will vary.
Fact: The cost of the home does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the home. This means that he will complete his business with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
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 pressure from any outside party to purchase or sell. The dollar amount demanded to rebuild a home is what constitutes the replacement cost.
Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to determine the worth of a home.
Fact: There are many varied ways that an appraiser will use to make a detailed analysis 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: When the economy is strong and the worth of houses are found to be appreciating by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Fact: All appreciation of value is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Frederick County or Fredrick, MD?Contact us
Myth: Just seeing what the house looks like on its exterior gives a good idea of its value.
Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.
Myth: Because 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 belongs to them.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the report. Consumers must be supplied with a version of the document through request because of the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.
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. Also, the appraisal makes a valuable record for future reference, filled with useful and often-revealing data - 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 area.
Myth: The only reason someone would hire an appraiser is if a house needs its price estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and may provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you have had a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector assesses the condition of the property and its major components and reports these findings.