Appraisal myths debunked
By law, an appraiser needs to be state-licensed to perform appraisals for federally-related sales. Also by law, you have the right to request a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller will have an influence in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will be the same as replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. The dollar amount necessary to reconstruct a home is what constitutes the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to come to the cost of a home.
Fact: An appraisal report is an amalgamation of information concluded from the house's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can count on Appraisal Services of Brandon, Inc .'s appraisers to be forthright in assessing this information.
Myth: When the economy is strong and the value of houses are found to be increasing by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser concludes concerning a certain property is always individualized, based on certain factors pulled from the information of comparable houses and other considerations within the house itself. This is true in strong economic times as well as poor.
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Myth: The home's outside is determinate of the actual price of the house; there is no need to do an interior inspection.
Fact: There are a multitude of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. 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 matter to consumers what's in the report so long as it satisfies the necessities of their lending agency.
Fact: Only if home buyers examine a copy of their appraisal report 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. There is a wealth of data contained in an appraisal that should 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 region.
Myth: The only reason someone would order an appraisal is if a property needs its worth assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal 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: A home inspection report has a completely different purpose than an appraisal. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. The purpose of a home inspector is to assess the condition of the home and its main components, then create a report on these findings.