Appraisal myths debunked
It is mandated by legal agencies that an appraiser needs to be state-licensed to perform appraisal reports for federally-related real estate sales in California. The law entitles you to receive a copy of your completed appraisal report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: It might be that California, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not always true. Often when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The appraised value of a property will be different depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The opinion of value of the house does not affect the payment of the appraiser; as a result, the appraiser has no preconceived interest in the opinion of value of the property. This means that he will provide services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will equal replacement cost.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. The dollar amount needed to rebuild a house is what forms the replacement cost.
Myth: There are certain methods that appraisers use to determine the opinion of value of a property, like the price per square foot.
Fact: There are many different formulae that an appraiser will use to make a full investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.
Myth: As properties increase their worth by a certain percentage - in a robust economic state - the homes nearby are figured to increase by the same amount.
Fact: Any value at which an appraiser arrives concerning a specific house is always personalized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact our professional staff
Myth: Just seeing what the house looks like on the outside gives an idea of its worth.
Fact: To determine an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be derived just by viewing the property from the outside.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal.
Fact: Legally, the appraisal 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 report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending institution is fine with the contents therein.
Fact: Only if consumers read 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. An appraisal can serve as a record for the future, as it contains an incredible amount of data - including, but certainly 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 order an appraisal unless you are trying to get an assessment of the cost of a house during a sales transaction involving a lending agency.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. The reason behind an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector determines the condition of the house and its main components and reports their findings.
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