Appraisal myths debunked
Legally, an appraiser needs to be state certified to create substantiated appraisal reports for federally-backed purchase. The law gives you the right to acquire a copy of your completed report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: It is probable that North Carolina, like most states, supports 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 remodeling has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: Depending on if the appraisal is written for the buyer or the seller, the appraised value of the property will vary.
Fact: The appraiser has no personal interest in the outcome of the report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are the ways appraisers use to determine the worth of a home.
Fact: There are many different formulae that an appraiser will use to make a comprehensive investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.
Myth: In a robust economy - when the values of houses in a given region are reported to be rising by a certain percentage - the worth of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: Value appreciation of a certain property is always determined on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the property itself. 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 our professional staff
Myth: Just examining what the house looks like on the outside gives an idea of its cost.
Fact: House value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply viewing the property from the outside.
Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the report. However, home buyers must be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.
Fact: Only if home buyers look at 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 wealth of information contained in an appraisal report 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 region.
Myth: Appraisals are ordered only to assess real estate property values in house sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and will perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal report. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. A home inspector assesses the condition of the house and its major components and reports these findings.