Appraisal myths debunked
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed transactions. Also by law, you have the ability to request a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller may have some pull in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraised value of the home does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the cost of the property. This means that he will complete his business with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement value of the home should be is on par with the market value.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under pressure from any external group to buy or sell. Replacement value is the dollar amount needed to reconstruct a home in-kind.
Myth: There are specific methods that real estate appraisers use to show the opinion of value of a house, like the price per square foot.
Fact: Appraisers make a detailed analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: In a powerful economy - when the costs of houses in a given region are reported to be increasing by a particular percentage - the costs of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: Any worth at which an appraiser concludes concerning a specific property is always personalized, based on certain factors derived from the information of comparable houses and other considerations within the home itself. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Larimer County or Fort Collins, CO?Contact us
Myth: Just looking at what the property looks like on its exterior gives a good idea of its value.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be found just by looking at the property from the outside.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they own their appraisal.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be provided with it by their lender.
Myth: Home buyers need not worry about what is in their appraisal so long as it exceeds the needs of their lending group.
Fact: A consumer should definitely read through their document; there might be some questions or some concerns about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, containing useful and often-revealing 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 proximity.
Myth: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but definitely 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 report.
Fact: A home inspection report has a completely different purpose than an appraisal. The point of an appraisal is to form an opinion of fair market value during the appraisal process and the production of the appraisal. The point of a home inspector is to determine the condition of the property and its major components, then provide a report on these inspection.