Common myths about appraising
Legally, an appraiser needs to be state certified to create substantiated real estate appraisals for federally-supported transactions. You also have the right to receive a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value generally will equate to market value.
Fact: It is probable that Kentucky, like most states, supports the common myth that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged period.
Myth: The value of a property will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: The replacement cost of the property will be is on par with the market value.
Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. Replacement value is the dollar amount necessary to rebuild a home in-kind.
Myth: There are specific methods that appraisers use to find the cost of a home, such as the price per square foot.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: When the economy is robust and the worth of homes are reported to be increasing by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.
Fact: Cost appreciation of a certain home is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. It doesn't matter if the economy is on the rise or declining.
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Myth: Just seeing what the property looks like on its exterior gives an excellent idea of its value.
Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. Consumers have to be supplied with a version of the report upon written request due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the report contains so long as their lending company is fine with the contents therein.
Fact: A home buyer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an exorbitant amount of 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you get a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. The reason behind an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector analyzes the condition of the property and its major components and reports their findings.