Common myths about appraising
Legally, a real estate appraiser has to be state certified to perform substantiated appraisal reports for federally-backed sales. You are also entitled by law to demand a copy of the completed appraisal from your lending agency. Contact Crest Appraisal Services if you have any questions about the appraisal process.
Myth: Market value must be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. There are times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The value of a home will be different depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The value of the property does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the opinion of value of the house. Obviously, he will render business with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: The replacement cost of the property should be is on par with the market value.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount demanded to reconstruct a house is what forms the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the value of a home, such as the price per square foot.
Fact: An appraisal is an amalgamation of information based on the home's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can rely on Crest Appraisal Services's staff to be professional in assessing this data.
Myth: In a strong economy - when the sales prices of houses in a given region are found to be appreciating by a certain percentage - the prices of individual houses in the proximity can be expected to increase by that same percentage.
Fact: All appreciation of price is on an individual basis, concluded by data on relevant elements and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
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Myth: Just looking at what the house looks like on its exterior gives an excellent idea of its worth.
Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal report.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with it by their lending company.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the necessities of their lending company.
Fact: Only if consumers check out a copy of their appraisal report can they verify 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 serve as a record for the future, since it contains a great deal of data - including, but certainly 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 hire an appraiser is if a home needs its cost estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. The task of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the building and its main components and reports these findings.