Common myths about appraising
By law, an appraiser is required to be state-licensed to produce appraisals for federally-related purchases. You also have the right to receive a copy of the completed report from your lending agency. Contact Elite Appraisal Services if you have any questions 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 commonly is not the case. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller sometimes may have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the property were rebuilt, the dollar amount necessary to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the value of a property, like the price per square foot.
Fact: An appraisal is an amalgamation of information based on the house's size, location, proximity to certain facilities, the condition of the home and the worth of recent comparable sales. You can count on Elite Appraisal Services's staff to be honest in assessing this data.
Myth: When the economy is doing well and the worth of houses are reported to be increasing by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Any cost at which an appraiser arrives concerning a specific house is always individualized, based on certain factors found from the data of comparable houses and other considerations within the house itself. It doesn't matter if the economy is doing well or declining.
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Myth: The property's outside is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.
Fact: There are a number of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply inspecting the home from the exterior.
Myth: Considering that the consumer is the one who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the report. Home buyers must be given a copy of the report through request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it satisfies the requirements of their lending company.
Fact: It is a very good idea for consumers to look at a copy of their appraisal so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending institution.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will express the condition of the house and its major components and possible damage.