Appraisal myths debunked
Legally, an appraiser must be state certified to produce substantiated real estate appraisals for federally-supported purchase. Also by law, you have the ability to request a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value should always be the same as to market value.
Fact: This is not often the case; most states do support the concept 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 vicinity have not been reassessed for an prolonged period.
Myth: Depending on if the appraisal is written for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraiser has no personal interest in the outcome of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should equal the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. If the property were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: There are certain ways that appraisers use to show the cost of a property, like the price per square foot.
Fact: Appraisers make a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: As properties appreciate by a specific percentage - in a strong economy - the homes around the appreciating properties are expected to appreciate by the same amount.
Fact: Price appreciation of a specific home has to be determined on an individualized basis, factoring in information on comparable houses and other relevant specifications within the house itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Queens County or Jamaica Estates, NY?Contact us
Myth: Just seeing what the house looks like on the outside gives a good idea of its cost.
Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to buy or refinance your house, you own the provided appraisal.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. However, consumers must be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the appraisal contains so long as their lending company is satisfied.
Fact: A home buyer should definitely look through their appraisal report; there could be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, filled with 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 proximity.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and will provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection. The task of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. The purpose of a home inspector is to determine the condition of the home and its main components, then provide a report on these findings.