Appraisal myths & facts
It is mandated by law that an appraiser needs to be state-licensed to produce appraisals for federally-related home purchases in California. Also by law, you have the right to demand a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should always be equal to market value.
Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this often is not the case. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the Newbury Park have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller sometimes may have an influence in the value of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: There are certain methods that appraisers use to determine the cost of a home, like the price per square foot.
Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can rely on Choice Appraisals, Inc.'s staff to be professional in assessing this data.
Myth: As homes appreciate by a certain percentage - in a strong economic state - the houses in proximity are expected to appreciate by the same amount.
Fact: Worth increase of a specific home is always determined on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Ventura County or Newbury Park, CA?Contact our professional staff
Myth: Just seeing what the property looks like on its exterior gives an excellent idea of its worth.
Fact: There are a multitude of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data needed.
Myth: Because the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. Consumers have to be given a version of the report through request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the necessities of their lending company.
Fact: It is very important for home buyers to peruse a copy of their appraisal 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 appraisal that should 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 area.
Myth: Appraisers are hired only to assess home values in house sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. House inspectors will compose a report that will express the condition of the house and its major components and possible damage.