Appraisal myths debunked
It is enforced by the government that an appraiser is required to be state-licensed to produce appraisal reports for federally-related property transactions in Nevada. The law allows you to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are prime examples of why this occurs.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no vested interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will equate to replacement cost.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular property, with neither being under duress to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the cost of a property.
Fact: There are many varied methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable homes.
Myth: When the economy is robust and the cost of properties are reported to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Value appreciation of a certain property has to be determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It makes no difference if the economy is powerful or on the decline.
Have other questions about appraisers, appraising or real estate in Clark County or Las Vegas, Nevada?Contact our professional staff
Myth: You can commonly find what a home is worth simply by looking at the outside.
Fact: House worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by looking at the house from the outside.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance real estate, you own the provided appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. By the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be given it by their lending agency.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it exceeds the requirements of their lending group.
Fact: Only if consumers check out a copy of their appraisal 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. An appraisal can serve as a record for the future, since it contains an incredible amount of data - 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: There is no reason to hire an appraiser unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lender.
Fact: Based upon their qualifications and designations, appraisers can and do perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
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. The purpose of a home inspector is to find the condition of the property and its major components, then create a report on their conclusions.