Common myths about appraising
Legally, a real estate appraiser needs to be state certified to create legitimate real estate appraisals for federally-supported purchase. You also have the right to request a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be the same as the market value.
Fact: While most states support the idea that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are prime examples of why the price can vary.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the opinion of value of the house will vary.
Fact: The appraiser has no personal interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external party to buy or sell. Replacement value is the dollar amount necessary to rebuild a property in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the worth of a property.
Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to specific facilities, the condition of the home and the price of recent comparable sales. You can rely on Darrow Appraisal Services's appraisers to be honest in assessing this information.
Myth: As houses appreciate by a specific percentage - in a strong economic state - the houses nearby are expected to increase by the same amount.
Fact: Cost increase of a certain home must be concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations. This is true in excellent economic times as well as poor.
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Myth: You can often find what a property is worth simply by looking at the outside.
Fact: Home worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by looking at the home from the exterior.
Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. However, home buyers have to be supplied with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.
Fact: It is very important for consumers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with useful 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 proximity.
Myth: Appraisers are hired only to assess real estate property values in property sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and will perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you order a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The task of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. House inspectors will create a report that will express the condition of the house and its major components and possible damage.