Appraisal myths & facts
It is mandated by legal agencies that a real estate appraiser must be state-licensed to perform appraisals for federally-related property transactions in Florida. You also have the right to acquire a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be the same as the market value.
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. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the value of the home will vary.
Fact: The opinion of value of the home does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the opinion of value of the property. What this means is he will complete his services with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell. The dollar amount needed to reconstruct a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to come to the cost of a property.
Fact: There are many different processes that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable properties.
Myth: In a strong economy - when the values of houses in a given area are reported to be appreciating by a particular percentage - the costs of individual properties in the area can be expected to rise by that same percentage.
Fact: All increase of worth is on an individual basis, determined by information on relevant conditions and the data of comparable properties. It makes no difference whether the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Saint Johns County or Ponte Vedra Beach, FL?Contact Performance Appraisals Inc.
Myth: Just seeing what the home looks like on its exterior gives a good idea of its value.
Fact: There are a number of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply examining the home from the outside.
Myth: Because the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be supplied with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the necessities of their lender.
Fact: A home buyer should definitely look through their appraisal; there could be some questions or some worries about the accuracy of the appraisal report that should be addressed. 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 certainly 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection report has a completely different purpose than an appraisal. The task of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the home and its major components and reports their findings.