Appraisal myths debunked
It is mandated by legal agencies that a real estate appraiser is required to be state-licensed to perform appraisals for federally-supported home sales in California. You also have the right to demand a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value has to be the same as the assessed value of the property.
Fact: While most states back the idea that assessed value equates estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged period.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should be the same as the replacement cost of the house.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the home were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to ascertain the value of a house.
Fact: There are many different formulae that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable homes.
Myth: In a powerful economy - when the costs of homes in a given neighborhood are found to be increasing by a certain percentage - the worth of individual houses in the area can be expected to appreciate by that same percentage.
Fact: Worth appreciation of a specific property is always concluded on a case-by-case basis, factoring in information on comparable houses and other relevant considerations. It makes no difference if the economy is powerful or poor.
Have other questions about appraisers, appraising or real estate in Ventura County or Oak Park, CA?Contact our professional staff
Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.
Fact: House worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance real estate, you own the provided appraisal report.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. Consumers must be given a copy of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal so long as it exceeds the needs of their lending agency.
Fact: Only if consumers read a copy of their appraisal can they ensure 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 stored in an report that can be useful to the home buyer 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a property needs its price estimated in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a variety 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 house inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The point of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. The point of a home inspector is to assess the condition of the property and its main components, then write a report on these conclusions.