Common myths about appraising
Legally, an appraiser must be state certified to produce substantiated appraisal reports for federally-related sales. The law gives you the right to receive a copy of your completed appraisal report from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be similar to to market value.
Fact: It is probable that California, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not often the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are excellent examples of why the price can vary.
Myth: Depending on if the appraisal is done for the buyer or the seller, the appraised value of the property will vary.
Fact: The price of the house does not affect the salary of the appraiser; as such, the appraiser has no preconceived interest in the value of the property. This means that he will provide task with impartiality and independence regardless for whom the appraisal is provided.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. The dollar amount necessary to rebuild a property is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot, are the ways appraisers use to come to the price of a property.
Fact: Appraisers make a full analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: As houses appreciate by a certain percentage - in a strong economic state - the homes around the appreciating properties are expected to increase by the same amount.
Fact: Any cost at which an appraiser arrives in regards to a particular house is always personalized, based on certain factors concluded from the information of comparable houses and other considerations within the property 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?Contact Associate Appraisers of America
Myth: The home's exterior is determinate of the actual price of the property; there is no need to do an interior inspection.
Fact: There are a number of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by looking at the home from the exterior.
Myth: Since you're the one paying for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. Home buyers must be provided with a copy of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the needs of their lender.
Fact: A home buyer should definitely inspect their appraisal report; there will probably be some questions or some worries with the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing an exorbitant 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: There is no reason to hire an appraiser unless you are trying to get an estimate of the cost of a house during a sales transaction involving a lending agency.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: Appraisal reports are completely different than a home inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting report. The purpose of a home inspector is to assess the condition of the house and its main components, then provide a report on their inspection.
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