Common myths about appraising
Legally, an appraiser is required to be state certified to create substantiated real estate appraisals for federally-supported purchase. You have the ability to acquire a copy of the completed report from your lender. Contact James Earp Appraisal Service if you have any concerns about the appraisal process.
Myth: Market value must be similar to the assessed value of the property.
Fact: It might be that North Carolina, like most states, supports the suggestion that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the home will vary.
Fact: The appraiser has no vested interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should equate to the replacement cost of the property.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under influence from any outside group to purchase or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.
Myth: Specific formulae, such as the price per square foot of the property, are the methods appraisers use to arrive at the price of a home.
Fact: Appraisers make a comprehensive analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a powerful economy - when the worth of properties in a given neighborhood are reported to be rising by a certain percentage - the prices of individual properties in the proximity can be expected to increase by that same percentage.
Fact: All increase of price is on an individual basis, concluded by information on relevant elements and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
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Myth: You can generally find what a house is worth simply by looking at the exterior.
Fact: To conclude an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply examining the house from the exterior.
Myth: Because the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the document. Consumers have to be given a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their report so long as it exceeds the requirements of their lending institution.
Fact: It is a very good idea for consumers to look at a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with useful and often-revealing data - including 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: Appraisals are ordered only to assess real estate property values in house 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 provide a variety 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: An appraisal does not fulfill the same purpose as an inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. The point of a home inspector is to determine the condition of the property and its main components, then write a report on their inspection.