Common myths about appraising
By law, an appraiser must be state-licensed to offer appraisals for federally-supported sales. Also by law, you have the right to receive a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this often is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are exact examples of why there might be a differential in price.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Any time market value is established, it should equate to the replacement cost of the property.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. The dollar amount necessary to reconstruct a home is what shows the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the value of a house, like the price per square foot.
Fact: An appraisal report is a collection of information concluded from the home's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on Furr Appraisal Service's appraisers to be forthright in assessing this information.
Myth: As properties appreciate by a specific percentage - in a robust economy - the homes around the appreciating properties are expected to appreciate by the same amount.
Fact: Worth increase of a certain home is always determined on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the property itself. This is true in excellent economic times as well as poor.
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Myth: You can often tell what a property is worth simply by looking at the outside.
Fact: Home value is concluded by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the property from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their home, they legally own their appraisal.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Home buyers must be supplied with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it meets the requirements of their lending group.
Fact: Only if home buyers examine a copy of their report 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. An appraisal report can double as a record for the future, containing an exorbitant amount of 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 area.
Myth: Appraisers are hired only to assess home values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection has a completely different purpose than an appraisal report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The task of a home inspector is to determine the condition of the home and its major components, then write a report on these findings.