Appraisal myths & facts
Legally, an appraiser is required to be state certified to produce legitimate appraisal reports for federally-backed sales. The law entitles you to receive a copy of your completed appraisal from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value should be similar to to market value.
Fact: While most states back the idea that assessed value is equal to estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are excellent examples of why there might be a differential in price.
Myth: The appraised value of a property will differ depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The cost of the house does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the opinion of value of the home. What this means is he will conduct task with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will equal replacement cost.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell. Replacement value is the dollar amount needed to rebuild a home in-kind.
Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to ascertain the cost of a property.
Fact: Appraisers make a full analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: When the economy is on the rise and the sales prices of homes are found to be increasing by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Fact: Price appreciation of a specific property is always concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference if the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in Coles County or Charleston, IL?Contact us
Myth: You can usually see what a home is worth simply by looking at the exterior.
Fact: Property value is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the home from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they own their appraisal.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even care about what the report contains so long as their lending institution is fine with the contents therein.
Fact: It is very important for consumers to read a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal that should be useful to the home buyer 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lender.
Fact: Ordering an appraisal 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: An appraisal report is the same as a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection. The reason behind an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. The task of a home inspector is to determine the condition of the house and its main components, then compose a report on these inspection.