Appraisal myths debunked
Legally, an appraiser needs to be state certified to perform legitimate appraisal reports for federally-supported sales. You also have the right to demand a copy of the completed appraisal report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Market value will always 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. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended period.
Myth: The value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The cost of the property does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the cost of the house. What this means is he will render services with impartiality and independence regardless for whom the appraisal is created.
Myth: Any time market value is found, it should be similar to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a house in-kind.
Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the worth of a home.
Fact: There are many different methods that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable properties.
Myth: As properties appreciate by a certain percentage - in a strong economy - the homes nearby are expected to appreciate by the same amount.
Fact: Any price at which an appraiser concludes in regards to a certain home is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the property itself. It makes no difference whether the economy is powerful or poor.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact our professional staff
Myth: The house's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Fact: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just examining the home from the outside.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. However, home buyers have to be provided with a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lending agency.
Fact: Only if consumers look through a copy of their appraisal 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, filled with useful 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the cost of a house during a sales transaction involving a lender.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the property and its main components and reports their findings.