Common myths about appraising
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed purchases. Also by law, you are entitled to request a copy of the completed report from your lender. Contact Sirius Appraisal Services if you have any questions about the appraisal procedure.
Myth: Market value will always be equivocal to the assessed value of the property.
Fact: While most states uphold the suggestion that assessed value equates estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are excellent examples of why this occurs.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the property will vary.
Fact: The appraiser has no personal interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under duress from any external group to buy or sell. The dollar amount demanded to rebuild a home is what forms the replacement cost.
Myth: Certain methods, such as the price per square foot, are the methods appraisers use to come to the worth of a home.
Fact: An appraisal is an assertion of information based on the house's size, location, proximity to certain facilities, the condition of the house and the price of recent comparable sales. You can depend on Sirius Appraisal Services's staff to be forthright in assessing this data.
Myth: When the economy is robust and the worth of homes are found to be increasing by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Fact: Cost appreciation of a specific house is always concluded on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the property itself. This is true in good economic times as well as bad.
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Myth: Just examining what the house looks like on its exterior gives an excellent idea of its worth.
Fact: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.
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, by law the appraisal is theirs.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Consumers have to be supplied with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lending institution is satisfied.
Fact: It is a very good idea for consumers to peruse a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, containing helpful and often-revealing data - 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending institution.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The job of the appraiser is to find an opinion of value in the appraisal process and through writing the report. The point of a home inspector is to determine the condition of the property and its major components, then write a report on their conclusions.