Appraisal myths & facts
Legally, a real estate appraiser must be state certified to create legitimate real estate appraisals for federally-backed purchase. Also by law, you have the ability to demand a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value will always equate to market value.
Fact: This usually isn't true; most states do support the idea 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 properties are perfect examples of why the price can vary.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the cost of the property will vary.
Fact: The cost of the property does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the property. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is provided.
Myth: Any time market value is established, it should equate to the replacement cost of the home.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a property without being under influence from any outside group to buy or sell. The dollar amount needed to rebuild a home is what forms the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the cost of a property.
Fact: There are many varied methods that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable properties.
Myth: As homes appreciate by a specific percentage - in a strong economy - the homes around the appreciating properties are figured to increase by the same amount.
Fact: All increase of value is on a case-by-case basis, found by information on relevant considerations and the data of comparable homes. It makes no difference if the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in Forsyth County or Clemmons, NC?Contact our professional staff
Myth: Just looking at what the home looks like on the outside gives a good idea of its value.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data required.
Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. However, home buyers have to be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the necessities of their lending agency.
Fact: It is a very good idea for home buyers to peruse a copy of their appraisal so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an incredible amount of information - 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its cost assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. An appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will produce a report that will show the condition of the property and its major components and possible damage.
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