Appraisal myths debunked
Legally, an appraiser needs to be state certified to produce legitimate appraisal reports for federally-related transactions. You also have the right to demand a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser must be the same as the market value.
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. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the appraised value of the home will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under influence from any outside group to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the value of a home.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: When the economy is doing well and the cost of houses are reported to be increasing by a certain percentage, the other houses in the vicinity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser arrives in regards to a particular house is always personalized, based on certain factors derived from the data of comparable properties and other considerations within the house itself. It makes no difference if the economy is good or on the decline.
Have other questions about appraisers, appraising or real estate in Coles County or Charleston, IL?Contact Corrie Appraisal & Consulting, Inc.
Myth: The home's exterior is determinate of the actual price of the home; there is no need to do an interior inspection.
Fact: House value is concluded by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just viewing the house from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your house, you own the ordered appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. Home buyers have to be provided with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lender.
Fact: A home buyer should definitely look through their appraisal report; there may 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. An report can serve as a record for the future, containing a great deal 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: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series 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: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. The job of a home inspector is to determine the condition of the house and its major components, then compose a report on their conclusions.