Appraisal myths debunked
By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported purchases. The law gives you the right to receive a copy of your completed appraisal from your lender after it has been provided. Contact WalshStreet Appraisals if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.
Fact: While most states uphold the concept that assessed value is the same as estimated market value, this often is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are perfect examples of why this occurs.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the home will vary.
Fact: The cost of the home does not affect the payment of the appraiser; as such, the appraiser has no preconceived interest in the value of the property. Obviously, he will complete his services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Any time market value is found, it should be the same as the replacement cost of the house.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: Specific methods, such as the price per square foot of the property, are the ways appraisers use to come to the value of a house.
Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to some facilities, the condition of the property and the cost of recent comparable sales. You can depend on WalshStreet Appraisals's staff to be ethical in assessing this information.
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 prices of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: Price increase of a certain home has to be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant specifications within the house itself. It makes no difference if the economy is robust or terrible.
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Myth: The home's outside is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.
Fact: Home value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information necessary.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. By the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with one by their lender.
Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the needs of their lending company.
Fact: Only if home buyers look at a copy of their report can they verify 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 makes an excellent record for future reference, containing helpful and often-revealing data - including, but not limited to, 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 hire an appraiser is if a home needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the house and its main components and reports these findings.