Common myths about appraising
Legally, an appraiser has to be state certified to perform legitimate real estate appraisals for federally-related purchase. The law entitles you to get a copy of your completed appraisal from your lender after it has been produced. Contact Mountain High Appraisals if you have any concerns about the appraisal process.
Myth: Market value has to be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are exact examples of why this occurs.
Myth: The buyer or the seller sometimes may have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Market value should equal replacement cost.
Fact: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: There are certain ways that appraisers use to find the value of a house, such as the price per square foot.
Fact: There are many varied processes that an appraiser will use to make a comprehensive investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable homes.
Myth: In a robust economy - when the sales prices of homes in a given region are found to be increasing by a particular percentage - the costs of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: All increase of worth is on a one-on-one basis, determined by data on relevant elements and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
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Myth: The home's outside is determinate of the actual value of the home; 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. There's no real way to get all of this information from simply examining the house from the outside.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance real estate, they legally own their appraisal report.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. However, home buyers must be provided with a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their appraisal so long as it exceeds the necessities of their lending institution.
Fact: A consumer should definitely inspect their appraisal; there may be some questions or some concerns about the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, comprised of useful and often-revealing information - 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 assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a variety 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 serves a completely different purpose than an appraisal report. The appraiser finds an opinion of value in the appraisal process and resulting appraisal report. House inspectors will create a report that will express the condition of the home and its major components and possible damage.