Common myths about appraising
Legally, a real estate appraiser needs to be state certified to write legitimate appraisal reports for federally-supported sales. The law entitles you to receive a copy of your finished report from your lender after it has been provided. Contact The Welter Appraisal Group if you have any questions about the appraisal procedure.
Myth: Market value must be the same as the assessed value of the property.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are perfect examples of why this occurs.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the house will vary.
Fact: The opinion of value of the house does not affect the pay of the appraiser; as such, the appraiser has no vested interest in the opinion of value of the property. What this means is he will complete his job 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 influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the property were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: There are specific ways that appraisers use to determine the value of a home, like the price per square foot.
Fact: An appraisal is an assertion of information concluded from the home's size, location, proximity to some facilities, the condition of the property and the price of recent comparable sales. You can count on The Welter Appraisal Group's staff to be forthright in assessing this information.
Myth: When the economy is robust and the cost of homes are reported to be appreciating by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.
Fact: All increase of value is on an individual basis, concluded by data on relevant conditions and the data of comparable houses. This is true in excellent economic times as well as poor.
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Myth: Just examining what the home looks like on its exterior gives an excellent idea of its worth.
Fact: To find an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by viewing the home from the outside.
Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Home buyers have to be supplied with a version of the document upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending agency.
Fact: Only if consumers read a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an 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 proximity.
Myth: Appraisals are ordered only to assess house values in property sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. The job of a home inspector is to determine the condition of the house and its major components, then write a report on their findings.