Appraisal myths debunked
By law, an appraiser needs to be state-licensed to offer appraisals for federally-related sales. The law entitles you to acquire a copy of your completed appraisal from your lender after it has been produced. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should be the same as to market value.
Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this often is not the case. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: The opinion of value of a property will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount required to do so would make up the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are the ways appraisers use to come to the worth of a home.
Fact: Appraisers make a full analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: When the economy is doing well and the sales prices of homes are found to be rising by a certain percentage, the other properties in the vicinity can be expected to rise based on that same percentage.
Fact: Worth appreciation of a certain property is always determined on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference if the economy is powerful or terrible.
Have other questions about appraisers, appraising or real estate in Saint Louis County or Chesterfield, MO?Contact us
Myth: Just seeing what the house looks like on its exterior gives an excellent idea of its cost.
Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by inspecting the home from the exterior.
Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. However, consumers have to be given a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.
Fact: Only if home buyers examine 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. There is a great deal of information contained in an appraisal that will probably be useful to the home buyer in the future, such as 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 region.
Myth: The only reason someone would order an appraisal is if a house needs its value assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a multitude of different 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: An appraisal does not serve the same purpose as an inspection report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The task of a home inspector is to approximate the condition of the property and its main components, then produce a report on these inspection.