Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported purchases. Also by law, you are allowed to demand a copy of the finished report from your lending agency. Contact M Davies Appraisal LLC if you have any concerns about the appraisal process.
Myth: Assessed value should be similar to to market value.
Fact: While most states back the idea that assessed value approximates estimated market value, this usually is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: The appraised value of a home will be different depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under influence from any external party to buy or sell. The replacement cost is the dollar amount required to reconstruct a home in-kind.
Myth: There are certain methods that appraisers use to determine the value of a property, such as the price per square foot.
Fact: An appraisal is an assertion of data concluded from the house's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can count on M Davies Appraisal LLC's appraisers to be professional in assessing this information.
Myth: As homes increase their worth by a specific percentage - in a robust economy - the properties nearby are expected to increase by the same amount.
Fact: Any worth at which an appraiser arrives in regards to a particular house is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the property itself. It doesn't matter if the economy is doing well or declining.
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Myth: You can often find what a home is worth simply by looking at the exterior.
Fact: There are a number of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by inspecting the home from the exterior.
Myth: Considering that the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the appraisal. Consumers have to be provided with a copy of the document upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending company.
Fact: It is a very good idea for home buyers to check over a copy of their report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal report that could 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: Appraisers are hired only to assess building values in property sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. House inspectors will create a report that will express the condition of the home and its major components and possible damage.