Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to produce substantiated real estate appraisals for federally-backed sales. Also by law, you are allowed to demand a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: While most states uphold the idea that assessed value is equal to estimated market value, this usually is not the case. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a property will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under pressure from any outside group to purchase or sell. If the house were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a house, such as the price per square foot.
Fact: There are many varied ways that an appraiser will use to make a comprehensive investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.
Myth: In a powerful economy - when the prices of homes in a given area are reported to be rising by a particular percentage - the prices of individual homes in the area can be expected to increase by that same percentage.
Fact: Any price at which an appraiser arrives concerning a specific home is always personalized, based on certain factors derived from the data of comparable homes and other considerations within the home itself. It makes no difference if the economy is good or bad.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact us
Myth: You can generally tell what a house is worth simply by looking at the outside.
Fact: Home worth is determined by a multitude of variables, 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 inspecting the property from the outside.
Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given one by their lending agency.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the needs of their lender.
Fact: Only if home buyers check out a copy of their appraisal 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. There is an incredible amount of information contained in an report that will probably 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 proximity.
Myth: Appraisals are ordered only to assess real estate property values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series 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: You shouldn't need to get an appraisal if you get a home inspection.
Fact: A home inspection report 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 producing the report. A home inspector assesses the condition of the home and its major components and reports these findings.