Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed transactions. Also by law, you are allowed to demand a copy of the completed appraisal report from your lending agency. Contact Graham Appraisal if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Fact: While most states uphold the idea that assessed value is the same as estimated market value, this usually is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are prime examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the appraised value of the property will vary.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the home.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. Replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to arrive at the value of a house.
Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can depend on Graham Appraisal's appraisers to be honest in assessing this information.
Myth: In a robust economy - when the prices of homes in a given county are reported to be appreciating by a certain percentage - the costs of individual properties in the area can be expected to rise by that same percentage.
Fact: Any worth at which an appraiser arrives concerning a certain property is always personalized, based on certain factors found from the data of comparable properties and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact Graham Appraisal
Myth: You can commonly find what a home is worth simply by looking at the outside.
Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the house from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the document. However, consumers have to be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it satisfies the necessities of their lending institution.
Fact: A home buyer should definitely read through their document; there could be some questions or some worries about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, comprised of 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: The only reason someone would hire an appraiser is if a property needs its value assessed in a lender-based sales transaction.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal does not fulfill the same purpose as an inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the house and its main components and reports these findings.