Common myths about appraising
It is enforced by the government that an appraiser is required to be state-licensed to offer appraisals for federally-related home transactions in California. The law allows you to receive a copy of your completed report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser will 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 dearth of reassessment on nearby homes are perfect examples of why this occurs.
Myth: The buyer or the seller often will have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: The opinion of value of the home does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the worth of the house. Obviously, he will render business with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: The replacement value of the house will be is on par with the market value.
Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under duress from any outside group to purchase or sell. If the home were rebuilt, the dollar amount required to do so would be the replacement cost.
Myth: There are certain methods that appraisers use to find the cost of a house, such as the price per square foot.
Fact: There are many numerous methods that an appraiser will use to make an in-depth investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable houses.
Myth: When the economy is strong and the sales prices of properties are found to be rising by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.
Fact: Value increase of a certain property has to be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. It doesn't matter if the economy is on the rise or declining.
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Myth: The property's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Fact: There are a number of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by looking at the home from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance real estate, you own the produced appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. However, consumers must be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lender.
Fact: Only if consumers look over a copy of their report can they ensure its accuracy and possibly need to question the result. 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 incredible amount of information - including, but certainly 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: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lender.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection report.
Fact: A home inspection report has a completely different purpose than an appraisal. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. House inspectors will create a report that will explain the condition of the home and its major components and possible damage.