Common myths about appraising
It is enforced by legal agencies that an appraiser needs to be state-licensed to produce appraisal reports for federally-related home purchases in California. Also by law, you are allowed to receive a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value should equate to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are exact examples of why this occurs.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the home will vary.
Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Any time market value is found, it should equal the replacement cost of the property.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the home were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to arrive at the cost of a house.
Fact: There are many different formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.
Myth: As homes appreciate by a certain percentage - in a strong economy - the houses around the appreciating properties are expected to appreciate by the same amount.
Fact: Worth increase of a certain property is always determined on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It makes no difference whether the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in Ventura County or Newbury Park, CA?Contact Choice Appraisals, Inc.
Myth: Just seeing what the house looks like on the outside gives an excellent idea of its value.
Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information needed.
Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be provided with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal document so long as it exceeds the requirements of their lending company.
Fact: A consumer should definitely inspect their document; there could be some questions or some concerns with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an report that could 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its worth estimated 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: There's no reason to get an appraisal if you get a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the appraisal report. The purpose of a home inspector is to determine the condition of the home and its main components, then compose a report on these conclusions.