Appraisal myths & facts
Legally, a real estate appraiser must be state certified to produce legitimate real estate appraisals for federally-backed purchase. The law allows you to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact Saxton Appraisals, Inc. if you have any questions about the appraisal process.
Myth: Assessed value should be equal to market value.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this generally is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby properties are perfect examples of why there might be a differential in price.
Myth: Depending on whether 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 conduct his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Market value will approximate replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a property is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the cost of a home.
Fact: An appraisal is a collection of data based on the house's size, location, proximity to undesirable facilities, the condition of the house and the cost of recent comparable sales. You can rely on Saxton Appraisals, Inc.'s appraisers to be honest in assessing this data.
Myth: In a powerful economy - when the worth of homes in a given region are reported to be appreciating by a certain percentage - the worth of individual homes in the proximity can be expected to rise by that same percentage.
Fact: All increase of worth is on an individual basis, concluded by information on relevant conditions and the data of comparable properties. This is true in excellent economic times as well as poor.
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Myth: You can commonly find what a house is worth simply by looking at the exterior.
Fact: There are a multitude of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the home from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your home, you own the produced appraisal.
Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be provided with it by their lending company.
Myth: There's no reason for consumers to even care about what the appraisal contains so long as their lending agency is fine with the contents therein.
Fact: Only if home buyers check out a copy of their report can they verify 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 can double as a record for the future, containing an incredible 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 vicinity.
Myth: Appraisals are ordered only to estimate house values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot 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: There's no need to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection report. The task of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. House inspectors will compose a report that will express the condition of the property and its major components and possible damage.