Appraisal myths debunked
Legally, a real estate appraiser needs to be state certified to create legitimate real estate appraisals for federally-supported transactions. You also have the right to acquire a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: While most states support the idea that assessed value approximates estimated market value, this often is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are prime examples of why this occurs.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraiser has no vested interest in the outcome of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should equal the replacement cost of the property.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under duress to buy or sell. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the cost of a house, such as the price per square foot.
Fact: Appraisers complete a full analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is robust and the worth of houses are reported to be rising by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.
Fact: All increase of value is on a one-on-one basis, found by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact Graham Appraisal
Myth: You can usually tell what a property is worth simply by looking at the outside.
Fact: There are a number of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived just by inspecting the house from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the produced appraisal.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given it by their lending company.
Myth: Home buyers need not care about what is in their document so long as it exceeds the requirements of their lending agency.
Fact: A home buyer should definitely read through their report; there may be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with 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 vicinity.
Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal. The appraiser finds an opinion of value in the appraisal process and resulting appraisal. A home inspector determines the condition of the property and its main components and reports their findings.