Appraisal myths debunked
It is required by the government that an appraiser needs to be state-licensed to perform appraisals for federally-supported real estate purchases in California. Also by law, you are allowed to demand a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Fact: While most states support the concept that assessed value is the same as estimated market value, this commonly is not the case. There are times when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the Huntington Beach have not been reassessed for quite a while, it may vary wildly.
Myth: The opinion of value of a house will change depending upon whether the appraisal is provided for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under influence from any outside party to buy or sell. The dollar amount necessary to reconstruct a property is what forms the replacement cost.
Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to come to the cost of a home.
Fact: Appraisers complete a detailed analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: When the economy is strong and the sales prices of properties are reported to be rising by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.
Fact: All increase of value is on a one-on-one basis, determined by data on relevant conditions and the data of comparable houses. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Orange County or Huntington Beach, CA?Contact our professional staff
Myth: The house's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from simply inspecting the property from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for your loan to buy or refinance your house, you own the ordered appraisal.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, consumers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending agency.
Fact: It is a very good idea for home buyers to peruse a copy of their report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an report that will probably 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a property needs its price assessed in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the report. The task of a home inspector is to find the condition of the property and its major components, then produce a report on their inspection.