Common myths about appraising
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed sales. The law allows you to get a copy of your completed report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: It could be that New York, like most states, supports the idea that the assessed value equates to the market value; however, this is not often the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Fact: The opinion of value of the house does not affect the payment of the appraiser; as a result, the appraiser has no pressured interest in the cost of the home. This means that he will provide task with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement cost of the property should be is on par with the market value.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount demanded to reconstruct a property is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the cost of a property.
Fact: There are many differing ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable houses.
Myth: As houses appreciate by a specific percentage - in a strong economy - the properties nearby are expected to appreciate by the same amount.
Fact: Worth increase of a specific home must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It makes no difference whether the economy is powerful or poor.
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Myth: The house's outside is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance real estate, they legally own their appraisal report.
Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the report. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given it by their lender.
Myth: It doesn't matter to consumers what's in the report so long as it meets the requirements of their lender.
Fact: Only if consumers look through 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. Also, the report makes a near perfect record for future reference, containing helpful and often-revealing 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: Appraisals are ordered only to estimate home values in home sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection serves a completely different purpose than an appraisal report. The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the property and its major components and reports these findings.