Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-related transactions. You have the ability to receive a copy of the finished appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should be equal to market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller may have an influence in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Market value should equal replacement cost.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under undue influence to buy or sell. The dollar amount required to rebuild a home is what shows the replacement cost.
Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to arrive at the cost of a house.
Fact: An appraisal is a collection of data based on the home's size, location, proximity to undesirable facilities, the condition of the home and the value of recent comparable sales. You can rely on Astute Appraisals, Inc.'s staff to be professional in assessing this information.
Myth: When the economy is on the rise and the value of properties are found to be increasing by a certain percentage, the other houses in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Any price at which an appraiser concludes in regards to a particular house is always personalized, based on certain factors pulled from the information of comparable houses and other considerations within the home itself. It makes no difference whether the economy is powerful or bad.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact our professional staff
Myth: Just looking at what the home looks like on the outside gives an excellent idea of its cost.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by inspecting the home from the exterior.
Myth: Because the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given it by their lender.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the requirements of their lending agency.
Fact: It is almost imperative for home buyers to look at a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an report that could be useful to the home buyer 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 vicinity.
Myth: Appraisers are hired only to estimate real estate property values in property sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a variety 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 nothing like a home inspection report. An appraiser forms an opinion of value in the appraisal process and resulting report. House inspectors will compose a report that will express the condition of the home and its major components and possible damage.