Common myths about appraising
Legally, a real estate appraiser needs to be state certified to write legitimate appraisal reports for federally-related sales. Also by law, you have the ability to demand a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Market value should be equivocal to 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. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why the price can vary.
Myth: The value of a property will differ depending upon if the appraisal is produced for the buyer or the seller.
Fact: The opinion of value of the property does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the opinion of value of the property. Obviously, he will conduct task with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. The dollar amount demanded to rebuild a house is what forms the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the worth of a house.
Fact: An appraisal is a collection of data concluded from the house's size, location, proximity to undesirable facilities, the condition of the house and the worth of recent comparable sales. You can rely on Furr Appraisal Service's staff to be forthright in assessing this information.
Myth: When the economy is robust and the value of properties are found to be increasing by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: Value increase of a specific property has to be determined on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the property itself. It makes no difference if the economy is good or poor.
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Myth: Just examining what the house looks like on the outside gives an idea of its worth.
Fact: There are a multitude of different variables that determine property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by viewing the property from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their property, they legally own their appraisal report.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the report. Consumers have to be given a copy of the report through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it satisfies the needs of their lending company.
Fact: Only if consumers look through a copy of their appraisal can they double-check 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 makes a valuable record for future reference, containing helpful and often-revealing 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: Appraisals are ordered only to assess home values in house sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of needs 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: There's no need to get an appraisal if you get a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will explain the condition of the house and its major components and possible damage.