Appraisal myths debunked
By law, an appraiser must be state-licensed to offer appraisals for federally-related purchases. The law allows you to acquire a copy of your completed report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be the same as the market value.
Fact: While most states back the idea that assessed value is equal to estimated market value, this commonly is not the case. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the Las Vegas have not been reassessed for quite some time, it may vary wildly.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the appraised value of the house will vary.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should conduct his job 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: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under pressure from any external party to purchase or sell. If the house were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the cost of a home, like the price per square foot.
Fact: There are many different processes that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.
Myth: When the economy is robust and the sales prices of properties are reported to be rising by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Fact: Value increase of a certain property has to be determined on an individualized basis, factoring in information on comparable houses and other relevant specifications within the property itself. It doesn't matter if the economy is on the rise or declining.
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Myth: Just examining what the property looks like on its exterior gives a good idea of its worth.
Fact: Property value is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information necessary.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their home, they legally own their appraisal report.
Fact: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the document. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lending company.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the needs of their lending agency.
Fact: Only if consumers look through a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing 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 area.
Myth: Appraisals are ordered only to assess real estate property values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the property and its main components and reports their findings.