Common myths about appraising
By law, an appraiser must be state-licensed to offer appraisals for federally-supported sales. The law entitles you to acquire a copy of your finished appraisal report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value will always 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 reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are perfect examples of why there might be a differential in price.
Myth: The buyer or the seller can have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
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 house. The replacement cost is the dollar amount necessary to rebuild a home in-kind.
Myth: There are certain methods that real estate appraisers use to show the cost of a home, such as the price per square foot.
Fact: There are many varied formulae that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable homes.
Myth: When the economy is on the rise and the worth of houses are found to be rising by a certain percentage, the other homes in the vicinity can be expected to rise based on that same percentage.
Fact: Any worth at which an appraiser concludes concerning a certain property is always individualized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. It makes no difference whether the economy is good or bad.
Have other questions about appraisers, appraising or real estate in Saint Louis County or Chesterfield, MO?Contact our professional staff
Myth: You can often find what a house is worth simply by looking at the exterior.
Fact: House value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the property 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, by law the appraisal belongs to them.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given one by their lender.
Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending institution is fine with the contents therein.
Fact: A home buyer should definitely read through their appraisal report; there might be some questions or some concerns about the accuracy of the appraisal 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 valuable record for future reference, filled with 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: Appraisals are ordered only to estimate home values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will express the condition of the property and its major components and possible damage.