Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to produce legitimate appraisal reports for federally-supported purchase. The law allows you to receive a copy of your finished report from your lender after it has been provided. Contact W. Eric Howard & Associates if you have any concerns about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: The buyer or the seller can have an influence in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the house were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the cost of a house.
Fact: There are many numerous ways that an appraiser will use to make a comprehensive analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable houses.
Myth: When the economy is robust and the worth of homes are reported to be appreciating by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Fact: All increase of worth is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Anne Arundel County or Severn, MD?Contact W. Eric Howard & Associates
Myth: Just looking at what the house looks like on its exterior gives an idea of its worth.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply examining the house from the outside.
Myth: Since the consumer is the party who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their appraisal report so long as it exceeds the requirements of their lending agency.
Fact: A consumer should definitely read through their report; there may be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains a great deal of data - 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: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a property during a sales transaction involving a lending company.
Fact: Based upon their qualifications and designations, appraisers can and will perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. An appraiser finds an opinion of value in the appraisal process and resulting appraisal report. House inspectors will compose a report that will express the condition of the property and its major components and possible damage.