Appraisal myths & facts
It is required by law that a real estate appraiser needs to be state-licensed to produce appraisal reports for federally-supported home purchases in California. Also by law, you are allowed to demand a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: It might be that California, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not often the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are excellent examples of why this occurs.
Myth: The buyer or the seller may have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Any time market value is found, it should equal the replacement cost of the property.
Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a home without being under pressure from any outside party to buy or sell. If the property were rebuilt, the dollar amount required to do so would make up the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the opinion of value of a house, like the price per square foot.
Fact: There are many varied processes that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable houses.
Myth: In a robust economy - when the values of properties in a given neighborhood are reported to be increasing by a certain percentage - the costs of individual properties in the vicinity can be expected to appreciate by that same percentage.
Fact: All increase of value is on a one-on-one basis, found by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Ventura County or Oak Park, CA?Contact our professional staff
Myth: Just seeing what the property looks like on its exterior gives a good idea of its cost.
Fact: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by examining the house from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be supplied with a version of the report upon written request as per the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely read through their appraisal report; there could be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, containing useful and often-revealing data - including 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: The only reason someone would hire an appraiser is if a house needs its worth assessed in a lender sales transaction.
Fact: Appraisers can have many varied 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: 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 report. The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report. The job of a home inspector is to approximate the condition of the home and its major components, then write a report on their inspection.