Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed transactions. You also have the right to request a copy of the finished report from your lending agency. Contact Graham Appraisal if you have any questions about the appraisal procedure.
Myth: Assessed value should always equate to market value.
Fact: It could be that Kentucky, like most states, validates the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller may have leverage in the value of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should be the same as replacement cost.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: Appraisers use a formula, such as a specific price per square foot, to arrive at the worth of a property.
Fact: An appraisal report is an amalgamation of data concluded from the home's size, location, proximity to some facilities, the condition of the property and the price of recent comparable sales. You can rely on Graham Appraisal's staff to be ethical in assessing this data.
Myth: In a strong economy - when the costs of homes in a given neighborhood are found to be increasing by a certain percentage - the worth of individual homes in the proximity can be expected to rise by that same percentage.
Fact: Any value at which an appraiser concludes in regards to a certain home is always personalized, based on certain factors concluded from the data of comparable homes and other specifications within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact Graham Appraisal
Myth: The home's outside is determinate of the actual price of the property; it is unnecessary to do an interior appraisal.
Fact: House worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data required.
Myth: Because the consumer is the person who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: The document 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 consumer requesting a copy of the appraisal report must be provided with it by their lender.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lending company.
Fact: A consumer should definitely read through their document; there could be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal report that could be useful to the consumer 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 area.
Myth: Appraisers are hired only to estimate building values in property sales involving mortgage-lending transactions.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection report.
Fact: Appraisal reports are nothing like a home inspection. An appraiser finds an opinion of value in the appraisal process and resulting report. The purpose of a home inspector is to find the condition of the property and its major components, then compose a report on these findings.