Appraisal myths debunked
By law, an appraiser must be state-licensed to offer appraisals for federally-backed purchases. You also have the right to demand a copy of the finished report from your lender. Contact Shamrock Appraisals, Inc. if you have any questions about the appraisal process.
Myth: Assessed value should equate to market value.
Fact: While most states back the suggestion that assessed value is the same as estimated market value, this often is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the house will vary.
Fact: The appraiser has no vested interest in the result of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should approximate replacement cost.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the cost of a home.
Fact: Appraisers complete a full analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As homes appreciate by a specific percentage - in a strong economy - the homes around the appreciating properties are figured to increase by the same amount.
Fact: Value appreciation of a specific house is always concluded on an individualized basis, factoring in data on comparable homes and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact Shamrock Appraisals, Inc.
Myth: The home's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by viewing the property from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their house, they legally own their appraisal report.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. However, home buyers must be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending company is fine with the contents therein.
Fact: A consumer should definitely inspect their appraisal; there could be some questions or some concerns about the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of 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 vicinity.
Myth: The only reason someone would order an appraisal is if a home needs its worth estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety 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 property inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. The purpose of a home inspector is to assess the condition of the property and its major components, then write a report on these inspection.