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Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-backed sales. The law entitles you to receive a copy of your finished report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value needs to be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the home will vary.

Fact: The price of the house does not affect the payment of the appraiser; as such, the appraiser has no vested interest in the value of the property. What this means is he will conduct job with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under pressure to buy or sell. If the home were rebuilt, the dollar amount needed to do so would form the replacement cost.

Myth: There are specific ways that appraisers use to show the cost of a property, such as the price per square foot.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent worth of comparable houses.

Myth: When the economy is doing well and the worth of homes are reported to be increasing by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.

Fact: All increase of value is on an individual basis, found by data on relevant considerations and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.

Have other questions about appraisers, appraising or real estate in Comanche County or Lawton, OK?

Contact our professional staff

Myth: The house's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the information needed.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the ordered appraisal.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be supplied with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the requirements of their lender.

Fact: It is almost imperative for consumers to read a copy of their appraisal so that they can verify the accuracy of the document, in case they 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 useful and often-revealing data - including 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: Appraisers are hired only to estimate building values in house sales involving mortgage-lending deals.

Fact: Based upon their qualifications and designations, appraisers can and will perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: An appraisal report is the same as a home inspection report.

Fact: A home inspection has a completely different purpose than an appraisal report. An appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will write a report that will determine the condition of the home and its major components and possible damage.