Appraisal myths debunked

It is mandated by legal agencies that an appraiser must be state-licensed to write appraisals for federally-related property sales in California. The law entitles you to acquire a copy of your completed report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should be the same as to market value.

Fact: While most states uphold the concept that assessed value is the same as estimated market value, this often is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why the price can vary.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the appraised value of the house will vary.

Fact: The cost of the home does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the property. What this means is he will conduct services with impartiality and independence regardless for whom the appraisal is created.

Myth: The replacement cost of the home is always is on par with the market value.

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under influence from any outside party to buy or sell. If the home were rebuilt, the dollar amount needed to do so would make up the replacement cost.

Myth: There are certain methods that appraisers use to determine the opinion of value of a house, such as the price per square foot.

Fact: An appraisal report is a collection of data based on the home's size, location, proximity to undesirable facilities, the condition of the house and the cost of recent comparable sales. You can count on Associate Appraisers of America's appraisers to be honest in assessing this information.

Myth: As properties increase their worth by a specific percentage - in a strong economic state - the homes within the same neighborhood are expected to appreciate by the same amount.

Fact: Any price at which an appraiser arrives in regards to a specific home is always individualized, based on certain factors pulled from the information of comparable homes and other considerations within the home itself. It doesn't matter if the economy is on the rise or declining.

Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?

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Myth: Just looking at what the house looks like on the outside gives an idea of its cost.

Fact: House worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.

Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the produced appraisal.

Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given one by their lending agency.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.

Fact: It is very important for home buyers to look at a copy of their report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing data - 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: The only reason someone would hire an appraiser is if a property needs its worth assessed in a lender sales transaction.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but certainly 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 the same as a home inspection.

Fact: Appraisal reports are nothing like a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. The job of a home inspector is to find the condition of the house and its major components, then compose a report on their inspection.

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