Common myths about appraising

It is required by law that a real estate appraiser needs to be state-licensed to offer appraisal reports for federally-related real estate purchases in Illinois. The law allows you to get a copy of your finished appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser should be the same as the market value.

Fact: It might be that Illinois, like most states, validates the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Sometimes when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The opinion of value of a house will be different 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 outcome of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.

Myth: Market value will approximate replacement cost.

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under duress to buy or sell. The dollar amount required to rebuild a property is what shows the replacement cost.

Myth: There are certain methods that real estate appraisers use to determine the opinion of value of a home, like the price per square foot.

Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can depend on Sutherland Appraisal Services, Inc.'s staff to be forthright in assessing this data.

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

Fact: Any cost at which an appraiser arrives concerning a particular house is always personalized, based on certain factors concluded from the information of comparable homes and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: House worth is concluded by a number of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just looking at the property from the exterior.

Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal.

Fact: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers must be given a version of the report through request due to the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lender.

Fact: A home buyer should definitely inspect their appraisal report; there will probably be some questions or some worries 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. An appraisal can double as a record for the future, as it contains 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 proximity.

Myth: The only reason someone would hire an appraiser is if a home needs its cost assessed in a lender sales transaction.

Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: There's no need to get an appraisal if you get a home inspection.

Fact: Appraisal reports are completely different than a home inspection. The appraiser decides upon an opinion of value in the appraisal process and resulting document. The job of a home inspector is to determine the condition of the house and its major components, then create a report on their findings.