Common myths about appraising
Legally, a real estate appraiser needs to be state certified to perform substantiated appraisal reports for federally-backed transactions. Also by law, you have the ability to receive a copy of the finished appraisal report from your lender. Contact Barnes Appraisal Company if you have any concerns about the appraisal process.
Myth: Assessed value generally will be similar to to market value.
Fact: While most states uphold the concept that assessed value equates estimated market value, this commonly is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged period of time.
Myth: The value of a home will change depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The price of the home does not affect the payment of the appraiser; as such, the appraiser has no pressured interest in the worth of the house. Obviously, he will provide services with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Market value will equate to replacement cost.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. The dollar amount necessary to rebuild a property is what constitutes the replacement cost.
Myth: Specific methods, such as the price per square foot, are the methods appraisers use to determine the price of a property.
Fact: An appraisal is an amalgamation of data based on the house's size, location, proximity to certain facilities, the condition of the property and the cost of recent comparable sales. You can rely on Barnes Appraisal Company's staff to be honest in assessing this data.
Myth: In a strong economy - when the costs of homes in a given neighborhood are reported to be increasing by a certain percentage - the worth of individual properties in the area can be expected to rise by that same percentage.
Fact: Cost appreciation of a specific property has to be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the property itself. It makes no difference whether the economy is robust or on the decline.
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Myth: Just examining what the house looks like on the outside gives an idea of its worth.
Fact: To find an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the house from the exterior.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal.
Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be given a copy of the report 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 satisfies the requirements of their lending agency.
Fact: It is a very good idea for consumers to peruse a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, containing helpful 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will explain the condition of the property and its major components and possible damage.