Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-backed sales. Also by law, you have the right to request a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value should be the same as the assessed value of the property.
Fact: While most states support the suggestion that assessed value is the same as estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the opinion of value of the house will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: Market value should equal replacement cost.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. If the home were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Specific formulae, like the price per square foot, are the ways appraisers use to determine the value of a home.
Fact: There are many numerous formulae that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable houses.
Myth: In a robust economy - when the sales prices of homes in a given county are reported to be increasing by a particular percentage - the costs of individual properties in the proximity can be expected to increase by that same percentage.
Fact: Price appreciation of a certain house has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Frederick County or Fredrick, MD?Contact our professional staff
Myth: The property's outside is determinate of the actual price of the property; it is unnecessary to do an interior appraisal.
Fact: Property worth is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived just by viewing the home from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance real estate, you own the ordered appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Consumers have to be provided with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal document so long as it meets the necessities of their lending company.
Fact: It is a very good idea for home buyers to check over a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal that can be useful to the home buyer in the future, such as 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 order an appraisal is if a house needs its cost assessed in a lender-based sales transaction.
Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The reason behind an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will write a report that will determine the condition of the home and its major components and possible damage.