Appraisal myths & facts

Legally, an appraiser has to be state certified to perform legitimate real estate appraisals for federally-supported transactions. Also by law, you have the ability to receive a copy of the finished appraisal report from your lender. Contact Performance Appraisals Inc. if you have any questions about the appraisal process.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the house will vary.

Fact: The cost of the home does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the cost of the property. What this means is he will conduct task with impartiality and independence regardless for whom the appraisal is created.

Myth: The replacement value of the home will be is on par with the market value.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. The dollar amount demanded to rebuild a house is what shows the replacement cost.

Myth: Specific formulae, like the price per square foot of the property, are what appraisers use to come to the worth of a property.

Fact: Appraisers make a full analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent worth of comparable homes.

Myth: As homes increase their worth by a specific percentage - in a strong economy - the houses in proximity are figured to appreciate by the same amount.

Fact: All increase of value is on a one-on-one basis, found by information on relevant elements and the data of comparable properties. This is true in strong economic times as well as poor.

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Myth: The property's outside is determinate of the actual worth of the property; there is no need to do an interior inspection.

Fact: House worth is determined by a number of variables, including area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by viewing the house from the exterior.

Myth: Since the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given it by their lending agency.

Myth: Consumers need not care about what is in their document so long as it exceeds the necessities of their lending company.

Fact: A consumer should definitely read through their report; there will probably be some questions or some concerns about the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, comprised of useful and often-revealing 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 order an appraisal is if a property needs its value assessed in a lender-based sales transaction.

Fact: Depending upon their qualifications and designations, appraisers can and may provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You don't have to get an appraisal if you order a home inspection.

Fact: A home inspection report serves a completely different purpose than an appraisal. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. House inspectors will write a report that will show the condition of the house and its major components and possible damage.