Appraisal myths & facts
By law, an appraiser is required to be state-licensed to offer appraisals for federally-supported sales. Also by law, you are entitled to receive a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value will always be similar to to market value.
Fact: While most states back the concept that assessed value equates estimated market value, this commonly is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the property will vary.
Fact: The opinion of value of the house does not affect the payment of the appraiser; due to this, the appraiser has no preconceived interest in the opinion of value of the home. What this means is he will conduct job with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside group to purchase or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the worth of a property.
Fact: There are many varied processes that an appraiser will use to make a detailed analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable houses.
Myth: As houses increase their worth by a certain percentage - in a robust economy - the properties around the appreciating properties are expected to appreciate by the same amount.
Fact: Worth increase of a certain property must be determined on an individualized basis, factoring in data on comparable homes and other relevant considerations. It makes no difference if the economy is good or bad.
Have other questions about appraisers, appraising or real estate in Granville County or Butner, NC?Contact us
Myth: You can usually find what a house is worth simply by looking at the exterior.
Fact: There are a number of different variables that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by looking at the home from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance real estate, they own their appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with it by their lending company.
Myth: There's no need for home buyers to even worry about what the appraisal report contains so long as their lending company is satisfied.
Fact: A consumer should definitely look through their appraisal report; there could be some questions or some worries 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. There is an incredible amount of data contained in an appraisal that can be useful to the consumer 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 proximity.
Myth: Appraisals are ordered only to assess real estate property values in home sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and may perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. The task of a home inspector is to assess the condition of the house and its major components, then provide a report on these inspection.