Appraisal myths debunked
Legally, a real estate appraiser is required to be state certified to produce substantiated real estate appraisals for federally-supported transactions. Also by law, you have the ability to demand a copy of the completed appraisal from your lender. Contact Astute Appraisals, Inc. if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: It is possible that Maryland, like most states, supports the idea that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. At times when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the cost of the home will vary.
Fact: The appraiser has no personal 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 found, it should be the same as the replacement cost of the house.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to come to the worth of a property.
Fact: Appraisers complete a detailed analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: As homes appreciate by a specific percentage - in a strong economy - the houses within the same neighborhood are figured to increase by the same amount.
Fact: Value increase of a specific property has to be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements. It makes no difference whether the economy is excellent or bad.
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Myth: Just examining what the property looks like on the outside gives an idea of its cost.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by inspecting the property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to buy or refinance real estate, you own the produced appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. By the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be given it by their lending company.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lending company.
Fact: A home buyer should definitely look through their report; there could be some questions or some worries about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect 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: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a house during a sales transaction involving a lender.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The task of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. The point of a home inspector is to approximate the condition of the property and its main components, then create a report on these conclusions.