Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-backed purchases. The law gives you the right to get a copy of your finished appraisal from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be the same as the market value.
Fact: While most states uphold the concept that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: The appraised value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will be the same as replacement cost.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside party to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: There are specific ways that appraisers use to determine the cost of a home, such as the price per square foot.
Fact: There are many varied calculations that an appraiser will use to make an in-depth analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.
Myth: As homes increase their worth by a certain percentage - in a robust economy - the houses within the same neighborhood are figured to appreciate by the same amount.
Fact: Any worth at which an appraiser concludes concerning a specific home is always individualized, based on certain factors concluded from the data of comparable homes and other specifications within the home itself. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Brazoria County or Pearland, TX?Contact our professional staff
Myth: Just looking at what the property looks like on the outside gives an excellent idea of its cost.
Fact: Home value 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 things can be found simply by examining the house from the exterior.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal 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 agency that purchased the appraisal. However, home buyers must be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the appraisal report contains so long as their lending company is satisfied.
Fact: Only if consumers look through a copy of their appraisal 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 an incredible amount of information stored in an appraisal that will probably 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 vicinity.
Myth: Appraisals are ordered only to assess house values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot 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 house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The reason behind an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector determines the condition of the house and its major components and reports their findings.