Appraisal myths debunked
It is enforced by the government that an appraiser must be state-licensed to offer appraisals for federally-related home transactions in Kentucky. Also by law, you are entitled to request a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: While most states back the concept that assessed value equates estimated market value, this commonly is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount demanded to reconstruct a home is what forms the replacement cost.
Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to ascertain the price of a home.
Fact: Appraisers make a full analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is robust and the worth of homes are found to be rising by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Cost appreciation of a certain house has to be determined on an individualized basis, factoring in information on comparable homes and other relevant specifications within the home itself. It makes no difference if the economy is excellent or on the decline.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact us
Myth: The house's exterior is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: There are a multitude of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information necessary.
Myth: Since the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. However, consumers have to be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the needs of their lending agency.
Fact: It is a very good idea for home buyers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, comprised of helpful and often-revealing information - including, but 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the worth of a home during a sales transaction involving a lender.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection. The job of the appraiser is to find an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the house and its major components and reports these findings.