Appraisal myths debunked

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related transactions. You are also entitled by law to acquire a copy of the completed appraisal from your lender. Contact Shamrock Appraisals, Inc. if you have any questions about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the Tuscaloosa have not been reassessed for quite some time, it may vary wildly.

Myth: The opinion of value of a home will vary depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: The value of the house does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the value of the property. This means that he will complete his services with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. The dollar amount required to reconstruct a house is what shows the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to arrive at the value of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: When the economy is doing well and the value of houses are reported to be appreciating by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.

Fact: Price increase of a specific house must be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. This is true in good economic times as well as bad.

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Myth: The home's outside is determinate of the actual worth of the home; there is no need to do an interior inspection.

Fact: Property value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the home from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your home, you own the produced appraisal report.

Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. By the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given it by their lending agency.

Myth: Consumers need not be concerned with what is in their report so long as it meets the needs of their lending institution.

Fact: It is very important for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained 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 area.

Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender sales transaction.

Fact: Hiring an appraiser can fulfill a variety of requirements 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: You don't need to get an appraisal if you have had a home inspection.

Fact: An appraisal report does not serve the same purpose as an inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting document. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.