Appraisal myths debunked
Legally, an appraiser has to be state certified to produce legitimate real estate appraisals for federally-supported transactions. The law allows you to receive a copy of your finished appraisal report from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Generally when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller sometimes may have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement value of the property should be is on par with the market value.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement cost is the dollar amount necessary to reconstruct a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the cost of a home.
Fact: Appraisers make a full analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: When the economy is on the rise and the worth of properties are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser arrives in regards to a particular house is always individualized, based on certain factors derived from the information of comparable properties and other considerations within the home itself. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact our professional staff
Myth: You can commonly tell what a property is worth simply by looking at the outside.
Fact: To determine an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection obviously can't provide all of the information needed.
Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance real estate, you own the produced appraisal report.
Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the report. Consumers must be supplied with a copy of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.
Fact: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries about 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 appraisal can double as a record for the future, as it contains a great deal of information - 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: Appraisers are hired only to estimate building values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform 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 report.
Fact: Appraisal reports have almost nothing in common with a home inspection. The purpose of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. House inspectors will create a report that will express the condition of the home and its major components and possible damage.