Common myths about appraising
Legally, an appraiser has to be state certified to perform legitimate appraisal reports for federally-backed transactions. The law gives you the right to receive a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: It is probable that California, like most states, validates the common myth that the assessed value equals the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: The opinion of value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The price of the home does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the value of the house. Obviously, he will complete his task with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount demanded to rebuild a property is what forms the replacement cost.
Myth: There are specific methods that appraisers use to determine the cost of a home, like the price per square foot.
Fact: There are many numerous ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.
Myth: In a robust economy - when the prices of houses in a given region are reported to be appreciating by a particular percentage - the costs of individual homes in the proximity can be expected to rise by that same percentage.
Fact: Any value at which an appraiser arrives concerning a certain house is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself. It makes no difference whether the economy is strong or on the decline.
Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?Contact Associate Appraisers of America
Myth: You can often see what a home is worth simply by looking at the outside.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information required.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your home, you own the provided appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given one by their lending agency.
Myth: Consumers need not worry about what is in their appraisal report so long as it satisfies the necessities of their lending company.
Fact: It is very important for consumers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal that could be useful to the home buyer in the future, such as 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 hire an appraiser unless you are trying to get an estimate of the cost of a property during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a lot 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 report.
Fact: A home inspection serves a completely different purpose than an appraisal report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will produce a report that will express the condition of the home and its major components and possible damage.
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