Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-related transactions. Also by law, you are entitled to request a copy of the finished report from your lending agency. Contact Sutherland Appraisal Services, Inc. if you have any concerns about the appraisal procedure.
Myth: Market value will be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Often when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the Naperville have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller can have an influence in the cost of the house depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is conducted.
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 purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. The replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the value of a home.
Fact: There are many varied methods that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.
Myth: As properties appreciate by a certain percentage - in a strong economic state - the properties within the same neighborhood are expected to increase by the same amount.
Fact: Any price at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the home itself. This is true in strong 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 property's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.
Fact: Property value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by examining the home from the exterior.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. However, home buyers must be provided with a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the appraisal report contains so long as their lender is satisfied.
Fact: Only if consumers read 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 report makes a valuable record for future reference, containing helpful 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 area.
Myth: Appraisers are hired only to assess building values in home sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection report has a completely different purpose than an appraisal report. The point of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the report. The point of a home inspector is to approximate the condition of the property and its main components, then produce a report on their findings.