Common myths about appraising
By law, an appraiser needs to be state-licensed to perform appraisals for federally-related purchases. Also by law, you have the right to demand a copy of the completed report from your lending agency. Contact Desert Sky Appraisers if you have any concerns about the appraisal process.
Myth: Market value should be similar 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. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.
Myth: The buyer or the seller often will have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: The value of the home does not affect the payment of the appraiser; as such, the appraiser has no vested interest in the value of the house. This means that he will render services with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount needed to rebuild a home in-kind.
Myth: There are specific ways that appraisers use to find the value of a home, such as the price per square foot.
Fact: An appraisal is a collection of information based on the house's size, location, proximity to undesirable facilities, the condition of the property and the price of recent comparable sales. You can count on Desert Sky Appraisers's staff to be forthright in assessing this information.
Myth: When the economy is doing well and the worth of homes are reported to be rising by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Any price at which an appraiser concludes in regards to a particular home is always personalized, based on certain factors concluded from the information of comparable homes and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
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Myth: Just examining what the house looks like on its exterior gives an excellent idea of its cost.
Fact: Home worth is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information necessary.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the ordered appraisal report.
Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the appraisal. Home buyers must be given a version of the report through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it exceeds the necessities of their lending agency.
Fact: It is very important for consumers to read a copy of their report so that they can verify the accuracy of the report, in case it's required to question its veracity. 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, containing an incredible amount of data - including, but certainly 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 proximity.
Myth: Appraisals are ordered only to assess house values in home sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and may perform a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection report. The purpose of an appraisal is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to determine the condition of the home and its main components, then compose a report on their findings.