Appraisal myths debunked
It is enforced by legal agencies that an appraiser must be state-licensed to perform appraisal reports for federally-supported property purchases in Illinois. The law entitles you to get a copy of your completed appraisal from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be the same as the market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged time.
Myth: The value of a home will be different depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should be the same as the replacement cost of the home.
Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount demanded to rebuild a home is what shows the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the value of a property.
Fact: Appraisers make a full analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: In a strong economy - when the sales prices of properties in a given area are found to be rising by a certain percentage - the values of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: Any value at which an appraiser arrives concerning a certain property is always personalized, based on certain factors concluded from the information of comparable houses and other specifications within the home itself. It makes no difference if the economy is robust or on the decline.
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Myth: The house's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior appraisal.
Fact: There are a number of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just examining the home from the outside.
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 report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with it by their lender.
Myth: There's no need for home buyers to even worry about what the appraisal report contains so long as their lending institution is satisfied.
Fact: Only if consumers check out a copy of their appraisal can they ensure its accuracy and possibly need to question the result. 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, comprised of 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: Appraisals are ordered only to assess building values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection report.
Fact: Appraisal reports are nothing like a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. A home inspector assesses the condition of the home and its main components and reports their findings.