Appraisal myths debunked
It is enforced by the government that a real estate appraiser is required to be state-licensed to create appraisal reports for federally-related home sales in California. You are also entitled by law to acquire a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: It is probable 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. Generally when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The opinion of value of a house will vary depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to arrive at the worth of a house.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: When the economy is robust and the cost of properties are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a particular house is always individualized, based on certain factors derived from the data of comparable houses and other specifications within the house itself. It makes no difference whether the economy is strong or terrible.
Have other questions about appraisers, appraising or real estate in Ventura County or Oak Park, CA?Contact our professional staff
Myth: You can commonly see what a property is worth simply by looking at the outside.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from simply inspecting the property from the outside.
Myth: Because the consumer is the party who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with one by their lender.
Myth: There's no reason for home buyers to even worry about what the report contains so long as their lending institution is satisfied.
Fact: It is almost imperative for consumers to check over a copy of their appraisal report so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing a great deal of 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 hire an appraiser is if a house needs its cost estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the house and its major components and reports their findings.