Appraisal myths & facts
It is enforced by the government that a real estate appraiser must be state-licensed to perform appraisal reports for federally-supported property transactions in Florida. Also by law, you have the right to receive a copy of the finished report from your lender. Contact Performance Appraisals Inc. if you have any concerns about the appraisal process.
Myth: Market value should be the same as the assessed value of the property.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the home will vary.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Any time market value is found, it should be similar to the replacement cost of the property.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any external party to purchase or sell. The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the cost of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a robust economy - when the costs of houses in a given county are found to be increasing by a particular percentage - the values of individual homes in the area can be expected to rise by that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a specific home is always individualized, based on certain factors pulled from the information of comparable houses and other specifications within the home itself. It makes no difference if the economy is excellent or bad.
Have other questions about appraisers, appraising or real estate in Saint Johns County or Ponte Vedra Beach, FL?Contact us
Myth: Just looking at what the house looks like on its exterior gives an excellent idea of its cost.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An exterior inspection obviously can't provide all of the information required.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your home, you own the provided appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given one by their lending agency.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending agency.
Fact: Only if home buyers look through a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an exorbitant amount of information - 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: Appraisals are ordered only to assess building values in house sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and often do perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. The job of a home inspector is to assess the condition of the property and its main components, then compose a report on these conclusions.