Appraisal myths debunked

It is mandated by law that an appraiser is required to be state-licensed to write appraisal reports for federally-related home sales in North Carolina. You also have the right to demand a copy of the completed report from your lending agency. Contact our professional staff 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: It is possible that North Carolina, like most states, supports the idea that the assessed value is the same as the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period.

Myth: The buyer or the seller will have some pull in the cost of the house depending upon for whom the appraiser is working.

Fact: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.

Myth: Any time market value is established, it should equal the replacement cost of the house.

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under pressure from any external group to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind.

Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to arrive at the worth of a property.

Fact: An appraisal report is a collection of information based on the house's size, location, proximity to specific facilities, the condition of the home and the price of recent comparable sales. You can count on James Earp Appraisal Service's staff to be forthright in assessing this information.

Myth: As houses appreciate by a certain percentage - in a robust economy - the houses within the same neighborhood are figured to increase by the same amount.

Fact: Worth increase of a specific home must be determined on an individualized basis, factoring in data on comparable homes and other relevant elements. It makes no difference whether the economy is good or poor.

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Myth: The home's outside is determinate of the actual worth of the home; there is no need to do an interior inspection.

Fact: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the home from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your house, you own the provided appraisal.

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lending company.

Myth: There's no need for consumers to even care about what the appraisal contains so long as their lending company is satisfied.

Fact: A home buyer should definitely look through their report; there could be some questions or some concerns with the accuracy of the report that must be addressed. 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 report that could 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 region.

Myth: The only reason someone would hire an appraiser is if a property needs its worth estimated in a lender sales transaction.

Fact: Depending upon their qualifications and designations, appraisers can and do perform a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You don't have to get an appraisal if you order a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. House inspectors will write a report that will show the condition of the property and its major components and possible damage.