Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to write legitimate real estate appraisals for federally-supported transactions. Also by law, you are allowed to request a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value should be equal to market value.
Fact: While most states uphold the suggestion that assessed value equates estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended period.
Myth: The buyer or the seller can have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: The value of the home does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the cost of the property. Obviously, he will provide job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. The dollar amount required to reconstruct a house is what constitutes the replacement cost.
Myth: Specific methods, such as the price per square foot, are what appraisers use to ascertain the cost of a house.
Fact: There are many varied calculations that an appraiser will use to make a full investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable properties.
Myth: When the economy is strong and the sales prices of homes are found to be rising by a certain percentage, the other homes in the neighborhood can be expected to rise based on that same percentage.
Fact: Any price at which an appraiser arrives in regards to a particular property is always individualized, based on certain factors found from the data of comparable homes and other considerations within the home itself. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Frederick County or Fredrick, MD?Contact our professional staff
Myth: Just seeing what the home looks like on its exterior gives an idea of its value.
Fact: Property value is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the house from the outside.
Myth: Since you're the one paying for the appraisal report when applying for your loan to buy or refinance real estate, you own the provided appraisal report.
Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be provided with one by their lending company.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the necessities of their lending company.
Fact: Only if consumers examine 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 report makes an excellent 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 area.
Myth: Appraisers are hired only to estimate house values in property sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. An appraiser finds an opinion of value in the appraisal process and resulting report. The task of a home inspector is to assess the condition of the house and its main components, then provide a report on these findings.