Common myths about appraising

It is required by law that an appraiser is required to be state-licensed to create appraisal reports for federally-related home purchases in Illinois. You are also entitled by law to acquire a copy of the finished appraisal report from your lending agency. Contact Sutherland Appraisal Services, Inc. if you have any concerns about the appraisal procedure.

Myth: Assessed value will always equate to market value.

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this generally is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.

Myth: The appraised value of a home will be different depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.

Myth: The replacement cost of the house is always is on par with the market value.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a property without being under pressure from any external group to buy or sell. If the property were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: Certain formulae, such as the price per square foot, are what appraisers use to come to the value of a property.

Fact: An appraisal is a collection of information based on the property's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on Sutherland Appraisal Services, Inc.'s staff to be forthright in assessing this information.

Myth: As houses increase their worth by a certain percentage - in a robust economy - the properties within the same neighborhood are expected to increase by the same amount.

Fact: Worth increase of a certain property is always determined on an individualized basis, factoring in data on comparable properties and other relevant elements. This is true in good economic times as well as bad.

Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?

Contact Sutherland Appraisal Services, Inc.

Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior appraisal.

Fact: Home value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just viewing the property from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to buy or refinance real estate, you own the produced appraisal.

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the appraisal. Consumers have to be provided with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the necessities of their lending company.

Fact: Only if consumers read a copy of their appraisal report 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. An appraisal can double as a record for the future, since it contains a great deal of 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: The only reason someone would order an appraisal is if a property needs its cost estimated in a lender-based sales transaction.

Fact: Based upon their qualifications and designations, appraisers can and often do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: An appraisal report is the same as a home inspection report.

Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through writing the report. The task of a home inspector is to approximate the condition of the home and its major components, then compose a report on their inspection.