Common myths about appraising

By law, an appraiser is required to be state-licensed to offer appraisals for federally-supported sales. You also have the right to receive a copy of the completed appraisal report from your lender. Contact Furr Appraisal Service if you have any questions about the appraisal procedure.

Myth: Assessed value should always be similar to to market value.

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. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is written for the buyer or the seller, the opinion of value of the property will vary.

Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement value of the property is always is on par with the market value.

Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the value of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: As houses appreciate by a specific percentage - in a robust economy - the properties in proximity are figured to increase by the same amount.

Fact: Any price at which an appraiser concludes in regards to a specific home is always individualized, based on certain factors concluded from the information of comparable properties and other specifications within the house itself. This is true in strong economic times as well as bad.

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Myth: The house's outside is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by viewing the house from the outside.

Myth: Considering that the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, home buyers have to be supplied with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even worry about what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: Only if home buyers check out a copy of their appraisal report 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 makes an invaluable record for future reference, filled with helpful and often-revealing information - including 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: Appraisers are hired only to assess house values in house sales involving mortgage-lending deals.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: An appraisal is the same as a home inspection.

Fact: A home inspection has a completely different purpose than an appraisal. The task of the appraiser is to form an opinion of value in the appraisal process and through creating the report. The purpose of a home inspector is to find the condition of the property and its main components, then write a report on these conclusions.



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