Appraisal myths debunked
Legally, an appraiser must be state certified to produce legitimate appraisal reports for federally-related purchase. You also have the right to receive a copy of the finished appraisal from your lender. Contact Sound Appraisal Group, Inc if you have any questions about the appraisal procedure.
Myth: Market value will always be the same as the assessed value of the property.
Fact: While most states back the concept that assessed value equates estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby properties are exact examples of why this occurs.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the house will vary.
Fact: The cost of the home does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the opinion of value of the house. Obviously, he will render business with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement value of the property should be is on par with the market value.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any outside party to buy or sell. The dollar amount necessary to reconstruct a home is what shows the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the worth of a property.
Fact: An appraisal report is an amalgamation of data based on the house's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can rely on Sound Appraisal Group, Inc's staff to be ethical in assessing this information.
Myth: As properties appreciate by a specific percentage - in a robust economy - the properties around the appreciating properties are expected to increase by the same amount.
Fact: Any cost at which an appraiser concludes in regards to a specific property is always personalized, based on certain factors pulled from the information of comparable houses and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
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Myth: You can often tell what a home is worth simply by looking at the outside.
Fact: Home value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by looking at the property from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their property, they own their appraisal.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. However, consumers must be given a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.
Fact: Only if home buyers examine a copy of their report 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 wealth of data stored in an report that should be useful to the consumer 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 vicinity.
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 provide a lot of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to determine the condition of the home and its main components, then provide a report on their conclusions.