Common myths about appraising

It is mandated by law that an appraiser needs to be state-licensed to create appraisals for federally-related home transactions in . Also by law, you are allowed to demand a copy of the finished report from your lender. Contact Choice Appraisals, Inc. (Owner retired to SC) if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser should be exactly the same as the market value.

Fact: It could be that , like most states, supports the idea that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged time.

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 personal interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should approximate replacement cost.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under influence from any external group to buy or sell. Replacement cost is the dollar amount required to reconstruct a house in-kind.

Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to determine the price of a house.

Fact: There are many numerous methods that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable homes.

Myth: When the economy is doing well and the value of properties are found to be rising by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.

Fact: All increase of worth is on an individual basis, determined by data on relevant conditions and the data of comparable properties. This is true in fair economic times as well as bad.

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Myth: The house's outside is determinate of the actual value of the house; it is unnecessary to do an interior inspection.

Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply examining the house from the outside.

Myth: Because consumers fund appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.

Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with it by their lending agency.

Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the requirements of their lender.

Fact: A home buyer should definitely inspect their report; there could be some questions or some worries about the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing a great deal of data - including, but certainly 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 vicinity.

Myth: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending transactions.

Fact: Depending upon their qualifications and designations, appraisers can and often do 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 is the same as a home inspection report.

Fact: Appraisal reports are completely different than a home inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. A home inspector assesses the condition of the home and its main components and reports these findings.