Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-related sales. Also by law, you are allowed to demand a copy of the completed report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be the same as to market value.
Fact: It could be that Maryland, like most states, validates the suggestion 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 has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: The opinion of value of a home will be different depending upon if the appraisal is produced for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is ordered.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: There are specific methods that real estate appraisers use to show the cost of a house, like the price per square foot.
Fact: An appraisal is an assertion of information based on the house's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can rely on Astute Appraisals, Inc.'s appraisers to be honest in assessing this data.
Myth: When the economy is robust and the cost of homes are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.
Fact: All appreciation of price is on a one-on-one basis, determined by data on relevant conditions and the data of comparable properties. It makes no difference whether the economy is excellent or bad.
Have other questions about appraisers, appraising or real estate in Howard County or Columbia, MD?Contact our professional staff
Myth: You can often find what a property is worth simply by looking at the outside.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these variables can be derived just by viewing the property from the exterior.
Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, home buyers have to be given a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their report so long as it satisfies the requirements of their lending institution.
Fact: A home buyer should definitely read through their document; there may be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, containing helpful and often-revealing data - including, but 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending institution.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. The task of a home inspector is to approximate the condition of the property and its major components, then write a report on their inspection.