Common myths about appraising

By law, an appraiser must be state-licensed to offer appraisals for federally-backed purchases. You have the ability to demand a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will be similar to to market value.

Fact: It could be that North Carolina, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the property will vary.

Fact: The appraiser has no vested interest in the outcome of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement value of the home is always is on par with the market value.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under duress to buy or sell. The dollar amount necessary to reconstruct a property is what forms the replacement cost.

Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to ascertain the value of a property.

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: When the economy is strong and the value of properties are reported to be appreciating by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.

Fact: Any price at which an appraiser concludes in regards to a particular house is always individualized, based on certain factors pulled from the data of comparable properties and other specifications within the home itself. It makes no difference whether the economy is strong or terrible.

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Myth: Just seeing what the home looks like on its exterior gives an excellent idea of its cost.

Fact: There are a multitude of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just inspecting the home from the outside.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they legally own their appraisal report.

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with one by their lending agency.

Myth: There's no reason for home buyers to even worry about what the appraisal report contains so long as their lender is satisfied.

Fact: Only if home buyers read a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains an incredible amount of data - including, but certainly 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 area.

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

Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal is no different than a home inspection report.

Fact: A home inspection serves a completely different purpose than an appraisal. The task of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. The job of a home inspector is to determine the condition of the home and its main components, then compose a report on these findings.