Appraisal myths debunked
Legally, an appraiser needs to be state certified to produce legitimate appraisal reports for federally-supported sales. You also have the right to receive a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value will always be the same as to market value.
Fact: It might be that North Carolina, like most states, validates the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.
Myth: The buyer or the seller often will have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should approximate replacement cost.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. If the house were reconstructed, the dollar amount needed to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the cost of a house.
Fact: An appraisal report is an amalgamation of information based on the house's size, location, proximity to certain facilities, the condition of the home and the value of recent comparable sales. You can depend on James Earp Appraisal Service's appraisers to be forthright in assessing this data.
Myth: As homes increase their worth by a certain percentage - in a strong economic state - the properties in proximity are figured to increase by the same amount.
Fact: All increase of worth is on a one-on-one basis, determined by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact us
Myth: The property's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the property from the outside.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. Home buyers must be provided with a copy of the report through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it meets the requirements of their lending agency.
Fact: A home buyer should definitely inspect their document; there could be some questions or some concerns with the accuracy of the appraisal report that need to 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, as it contains an exorbitant amount of data - 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting document. The job of a home inspector is to find the condition of the property and its main components, then write a report on their conclusions.