Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-backed transactions. Also by law, you are entitled to receive a copy of the finished appraisal report from your lender. Contact Las Vegas Appraisal Service, Inc. if you have any questions about the appraisal procedure.
Myth: Market value has to be similar to the assessed value of the property.
Fact: While most states support the concept that assessed value is the same as estimated market value, this generally is not the case. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: Depending on whether 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 report and should conduct 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: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a house without being under influence from any outside group to buy or sell. If the home were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent worth of comparable houses.
Myth: When the economy is doing well and the value of properties are found to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Any price at which an appraiser concludes in regards to a particular property is always individualized, based on certain factors pulled from the data of comparable homes and other specifications within the property itself. It makes no difference if the economy is robust or bad.
Have other questions about appraisers, appraising or real estate in Clark County or Las Vegas, Nevada?Contact Las Vegas Appraisal Service, Inc.
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior inspection.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from just examining the home from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given it by their lending company.
Myth: Consumers need not worry about what is in their appraisal document so long as it exceeds the necessities of their lending institution.
Fact: Only if home buyers examine a copy of their appraisal 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 appraisal 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 area.
Myth: Appraisers are hired only to assess home values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection. An appraiser finds an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the building and its major components and reports their findings.