Appraisal myths debunked

Legally, an appraiser has to be state certified to create substantiated appraisal reports for federally-related purchase. Also by law, you are entitled to receive a copy of the completed appraisal from your lender. Contact Kent & Associates Appraisal if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser will be equivalent to the market value.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the house will vary.

Fact: The appraiser has no vested interest in the result of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. If the house were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: There are certain methods that real estate appraisers use to determine the cost of a property, like the price per square foot.

Fact: Appraisers make a comprehensive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.

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

Fact: Value appreciation of a certain home must be determined on an individualized basis, factoring in information on comparable homes and other relevant specifications within the house itself. It makes no difference if the economy is powerful or terrible.

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Myth: The home's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from simply looking at the house from the outside.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers must be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not care about what is in their appraisal report so long as it satisfies the necessities of their lending institution.

Fact: A home buyer should definitely read through their appraisal; there could be some questions or some concerns about the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an appraisal report that will probably be useful to the consumer 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 area.

Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the worth of a home during a sales transaction involving a lending agency.

Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: There's no reason to get an appraisal if you get a home inspection.

Fact: An appraisal report does not fulfill the same purpose as an inspection report. The job of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. House inspectors will create a report that will explain the condition of the house and its major components and possible damage.