Appraisal myths debunked
Legally, an appraiser must be state certified to produce substantiated real estate appraisals for federally-backed transactions. Also by law, you are allowed to request a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value generally will equate to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. At times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller can have an influence in the value of the house depending upon for whom the appraiser is working.
Fact: The opinion of value of the home does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the worth of the property. What this means is he will conduct job with impartiality and independence regardless for whom the appraisal is created.
Myth: The replacement cost of the property should be is on par with the market value.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount necessary to rebuild a home is what forms the replacement cost.
Myth: Specific methods, such as the price per square foot, are the ways appraisers use to determine the value of a house.
Fact: An appraisal report is an amalgamation of information concluded from the home's size, location, proximity to certain facilities, the condition of the home and the cost of recent comparable sales. You can rely on Graham Appraisal's appraisers to be professional in assessing this information.
Myth: In a robust economy - when the prices of homes in a given area are reported to be appreciating by a particular percentage - the prices of individual homes in the proximity can be expected to rise by that same percentage.
Fact: Price increase of a specific home must be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Barren County or Glasgow, KY?Contact us
Myth: The house's outside is determinate of the actual price of the house; it is unnecessary to do an interior appraisal.
Fact: There are a number of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information required.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they legally own their appraisal.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers must be supplied with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is satisfied.
Fact: A consumer should definitely inspect their appraisal; there will probably be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with useful and often-revealing information - 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. The task of a home inspector is to find the condition of the property and its major components, then compose a report on their findings.