Appraisal myths debunked
It is enforced by the government that a real estate appraiser needs to be state-licensed to produce appraisals for federally-supported property transactions in Kentucky. You are also entitled by law to request a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value will be the same as the assessed value of the property.
Fact: While most states support the suggestion that assessed value equates estimated market value, this often is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: The opinion of value of a property will vary depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The appraised value of the home does not affect the pay of the appraiser; due to this, the appraiser has no preconceived interest in the worth of the property. Obviously, he will provide services with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under duress to buy or sell. The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: There are specific ways that appraisers use to determine the value of a home, such as the price per square foot.
Fact: There are many different calculations that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable houses.
Myth: When the economy is robust and the cost of properties are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.
Fact: All appreciation of price is on an individual basis, concluded by information on relevant conditions and the data of comparable homes. It makes no difference if the economy is powerful or bad.
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Myth: The house's outside is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.
Fact: Home worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the home from the outside.
Myth: Since the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it satisfies the needs of their lending institution.
Fact: It is almost imperative for consumers to go through a copy of their appraisal so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, comprised of helpful 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: There is no reason to order an appraisal unless you are trying to get an assessment of the worth of a house during a sales transaction involving a lending agency.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The function of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the report. A home inspector assesses the condition of the property and its main components and reports these findings.