Common myths about appraising
It is mandated by the government that an appraiser is required to be state-licensed to create appraisals for federally-supported property purchases in Maryland. You also have the right to acquire a copy of the finished appraisal report from your lending agency. Contact Magee Appraisal Service if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.
Fact: It is possible that Maryland, like most states, validates the idea that the assessed value equals the market value; however, this certainly varies based on state-to-state. At times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller can have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the house should be is on par with the market value.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under influence from any outside party to buy or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.
Myth: There are certain methods that appraisers use to determine the opinion of value of a property, such as the price per square foot.
Fact: An appraisal is a collection of data based on the property's size, location, proximity to specific facilities, the condition of the home and the cost of recent comparable sales. You can rely on Magee Appraisal Service's staff to be forthright in assessing this information.
Myth: When the economy is doing well and the worth of properties are found to be increasing by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.
Fact: All increase of worth is on a case-by-case basis, found by data on relevant conditions and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
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Myth: You can commonly see what a property is worth simply by looking at the exterior.
Fact: Property worth is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data necessary.
Myth: Since you're the one funding for the appraisal report when applying for your loan to buy or refinance your home, you own the provided appraisal report.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. However, home buyers must be provided with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the needs of their lender.
Fact: A home buyer should definitely inspect their appraisal report; there will probably be some questions or some concerns with the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report that will probably be useful to the consumer 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lending agency.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot 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: An appraisal report is the same as a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. House inspectors will produce a report that will show the condition of the property and its major components and possible damage.