Appraisal myths & facts
It is mandated by legal agencies that a real estate appraiser is required to be state-licensed to produce appraisals for federally-supported home sales in North Carolina. The law entitles you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact James Earp Appraisal Service if you have any concerns about the appraisal procedure.
Myth: Market value will be similar to the assessed value of the property.
Fact: It could be that North Carolina, like most states, supports the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are excellent examples of why there might be a differential in price.
Myth: Depending on if the appraisal is written for the buyer or the seller, the appraised value of the house will vary.
Fact: The appraiser has no personal interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular property, with neither being under pressure to buy or sell. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a house.
Fact: There are many varied ways that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable homes.
Myth: In a powerful economy - when the sales prices of homes in a given neighborhood are reported to be increasing by a certain percentage - the values of individual properties in the vicinity can be expected to appreciate by that same percentage.
Fact: Any cost at which an appraiser concludes concerning a particular home is always personalized, based on certain factors derived from the information of comparable homes and other specifications within the home itself. It makes no difference if the economy is powerful or poor.
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Myth: Just examining what the property looks like on its exterior gives an excellent idea of its cost.
Fact: Property value is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the produced appraisal report.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with one by their lending agency.
Myth: Home buyers need not care about what is in their appraisal document so long as it satisfies the requirements of their lending agency.
Fact: Only if consumers check out a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude 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: There's no reason to get an appraisal if you get a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The reason behind an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector analyzes the condition of the building and its main components and reports these findings.