Appraisal myths debunked
By law, an appraiser needs to be state-licensed to produce appraisals for federally-related purchases. You are also entitled by law to acquire a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: The value of a home will vary depending upon if the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement cost of the house should be is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under undue influence to buy or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the opinion of value of a property, like the price per square foot.
Fact: There are many numerous processes that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable properties.
Myth: When the economy is robust and the value of houses are found to be rising by a certain percentage, the other properties in the area can be expected to appreciate based on that same percentage.
Fact: All increase of worth is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable properties. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?Contact Sutherland Appraisal Services, Inc.
Myth: Just looking at what the home looks like on the outside gives an idea of its value.
Fact: There are a number of different factors that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, 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. Consumers have to be provided with a copy of the document upon written request as per the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal report contains so long as their lending agency is satisfied.
Fact: Only if consumers examine a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored 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 area.
Myth: Appraisers are hired only to estimate home values in property sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. A home inspector assesses the condition of the home and its main components and reports their findings.