Appraisal myths & facts
It is enforced by the government that an appraiser needs to be state-licensed to write appraisals for federally-related home transactions in Missouri. The law gives you the right to acquire a copy of your finished appraisal from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value should be similar 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 is not aware of and a dearth of reassessment on nearby homes are perfect examples of why there might be a differential in price.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the value of the house will vary.
Fact: The appraiser has no personal interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should equate to replacement cost.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any external party to buy or sell. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.
Myth: Specific methods, like the price per square foot, are what appraisers use to ascertain the cost of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.
Myth: When the economy is doing well and the sales prices of houses are found to be appreciating by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.
Fact: All appreciation of value is on an individual basis, found by information on relevant conditions and the data of comparable homes. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Saint Louis County or Chesterfield, MO?Contact Levison Appraisal Company
Myth: You can usually find what a property is worth simply by looking at the exterior.
Fact: Property value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just inspecting the property from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to buy or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given it by their lending company.
Myth: Consumers need not care about what is in their document so long as it satisfies the requirements of their lending group.
Fact: Only if home buyers examine a copy of their report can they verify 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 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal does not fulfill the same purpose as an inspection. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will determine the condition of the home and its major components and possible damage.