Appraisal myths debunked
By law, an appraiser is required to be state-licensed to produce appraisals for federally-backed sales. You have the ability to request a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value generally will equate to market value.
Fact: It is possible that Illinois, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not always true. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the property will vary.
Fact: The appraiser has no personal interest in the result of the appraisal 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 equate to the replacement cost of the property.
Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the property were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the value of a property, like the price per square foot.
Fact: An appraisal report is a collection of data based on the property's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can count on Sutherland Appraisal Services, Inc.'s appraisers to be ethical in assessing this information.
Myth: In a powerful economy - when the values of homes in a given region are found to be increasing by a particular percentage - the values of individual houses in the vicinity can be expected to appreciate by that same percentage.
Fact: Cost appreciation of a specific home has to be determined on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It makes no difference whether the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?Contact our professional staff
Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.
Fact: There are a multitude of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by inspecting the property from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the ordered appraisal report.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the document. However, consumers have to be given a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.
Fact: It is a very good idea for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing useful and often-revealing 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: Appraisers can have many varied qualifications and designations which allow them to provide a variety 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: There's no reason to get an appraisal if you have had a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The point of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to assess the condition of the house and its main components, then create a report on their inspection.