Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported sales. The law entitles you to receive a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.
Myth: Assessed value should always be the same as to market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a home will be different depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: The replacement value of the house will be is on par with the market value.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside group to buy or sell. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to come to the value of a house.
Fact: Appraisers make an exhaustive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a strong economy - when the sales prices of properties in a given area are reported to be appreciating by a particular percentage - the costs of individual homes in the area can be expected to appreciate by that same percentage.
Fact: Cost appreciation of a certain house must be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Anne Arundel County or Severn, MD?Contact us
Myth: The property's exterior is determinate of the actual worth of the house; there is no need to do an interior appraisal.
Fact: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information necessary.
Myth: Considering that the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Consumers have to be supplied with a copy of the document through request because of the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lending company is satisfied.
Fact: A home buyer should definitely inspect their appraisal; there might be some questions or some concerns with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an appraisal that should be useful to the consumer in the future, such as 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 estimate house values in house sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of needs 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 house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. House inspectors will create a report that will show the condition of the house and its major components and possible damage.