Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-related purchases. Also by law, you have the ability to receive a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller may have some pull in the value of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equal replacement cost.
Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell. Replacement value is the dollar amount needed to reconstruct a property in-kind.
Myth: There are specific ways that appraisers use to determine the cost of a property, like the price per square foot.
Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on Graham Appraisal's staff to be honest in assessing this data.
Myth: As houses increase their worth by a specific percentage - in a strong economy - the properties nearby are expected to appreciate by the same amount.
Fact: Worth increase of a specific property has to be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the property itself. It makes no difference if the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact Graham Appraisal
Myth: You can commonly see what a house is worth simply by looking at the exterior.
Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information needed.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their home, they own their appraisal report.
Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the appraisal. However, consumers have to be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their document so long as it exceeds the necessities of their lending institution.
Fact: A home buyer should definitely read through their appraisal report; there may be some questions or some concerns with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an incredible amount of 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 house values in home sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of necessities 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 home inspection serves the same purpose as an appraisal.
Fact: A home inspection has a completely different purpose than an appraisal. The task of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. The purpose of a home inspector is to determine the condition of the home and its major components, then compose a report on their conclusions.