Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported sales. Also by law, you have the ability to demand a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value generally will equate to market value.
Fact: While most states uphold the idea that assessed value is the same as estimated market value, this often is not the case. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: The value of a property will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under pressure from any outside party to purchase or sell. The dollar amount necessary to reconstruct a house is what shows the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to come to the worth of a home.
Fact: An appraisal report is a collection of information concluded from the home's size, location, proximity to some facilities, the condition of the house and the price of recent comparable sales. You can count on James Earp Appraisal Service's appraisers to be honest in assessing this information.
Myth: When the economy is robust and the value of homes are found to be increasing by a certain percentage, the other homes in the neighborhood can be expected to appreciate based on that same percentage.
Fact: All increase of price is on a case-by-case basis, found by information on relevant elements and the data of comparable homes. 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 James Earp Appraisal Service
Myth: Just looking at what the home looks like on its exterior gives an excellent idea of its worth.
Fact: There are a number of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information necessary.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they legally own their appraisal report.
Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report. Because of the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given it by their lending agency.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending company.
Fact: A consumer should definitely look through their appraisal report; there will probably be some questions or some worries about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, comprised of useful and often-revealing information - 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 area.
Myth: Appraisers are hired only to estimate building values in house sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of wants 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: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are completely different than a home inspection. The reason behind an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. The point of a home inspector is to approximate the condition of the home and its major components, then produce a report on their findings.