Appraisal myths debunked
By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported transactions. Also by law, you are allowed to request a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be the same as the market value.
Fact: It is probable that Maryland, like most states, validates the idea that the assessed value equates to the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period.
Myth: The value of a house will change depending upon if the appraisal is produced for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be similar to the replacement cost of the property.
Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a specific property, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount needed to reconstruct a property in-kind.
Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to determine the cost of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: When the economy is strong and the worth of properties are found to be appreciating by a certain percentage, the other properties in the area 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 individualized, based on certain factors concluded from the data of comparable homes and other considerations within the home itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact Astute Appraisals, Inc.
Myth: Just seeing what the property looks like on the outside gives an excellent idea of its cost.
Fact: House worth is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by looking at the home from the outside.
Myth: Since you're the one paying for the appraisal when applying for your loan to buy or refinance real estate, you own the ordered appraisal.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. However, home buyers have to be provided with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the necessities of their lending group.
Fact: A consumer should definitely look through their document; there may 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. Also, the appraisal report makes a near perfect record for future reference, filled with 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 vicinity.
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 definitely 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 have had a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting document. The task of a home inspector is to assess the condition of the property and its main components, then compose a report on these conclusions.