Common myths about appraising
Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-backed transactions. You have the ability to acquire a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
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. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the opinion of value of the house will vary.
Fact: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under duress from any external group to buy or sell. If the house were rebuilt, the dollar amount needed to do so would set the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to figure out the cost of a home.
Fact: An appraisal is an amalgamation of information based on the property's size, location, proximity to some facilities, the condition of the home and the price of recent comparable sales. You can count on Graham Appraisal's staff to be honest in assessing this information.
Myth: In a strong economy - when the costs of properties in a given region are found to be rising by a certain percentage - the values of individual homes in the area can be expected to increase by that same percentage.
Fact: All increase of value is on a one-on-one basis, found by data on relevant elements and the data of comparable properties. This is true in fair economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact us
Myth: The home's exterior is determinate of the actual price of the house; it is unnecessary to do an interior inspection.
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 current market trends. An outside-only inspection certainly can't provide all of the data necessary.
Myth: Because the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal 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. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with it by their lending company.
Myth: There's no point for home buyers to even care about what the report contains so long as their lending agency is fine with the contents therein.
Fact: Only if home buyers check out a copy of their report can they double-check its accuracy and possibly need to question the result. 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 information - 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 home needs its value assessed in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a variety of different 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.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The task of the appraiser is to form an opinion of value in the appraisal process and through writing the report. A home inspector analyzes the condition of the house and its major components and reports their findings.