Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed sales. Also by law, you are entitled to receive a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value will always be equal to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period.
Myth: The appraised value of a home will be different depending upon if the appraisal is ordered for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. The replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to determine the value of a home.
Fact: There are many varied ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable properties.
Myth: As homes increase their worth by a certain percentage - in a robust economic state - the properties around the appreciating properties are expected to appreciate by the same amount.
Fact: All increase of price is on a case-by-case basis, concluded by information on relevant conditions and the data of comparable properties. 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 Sirius Appraisal Services
Myth: Just examining what the property looks like on the outside gives an idea of its worth.
Fact: Property value is determined by a number of factors, including location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data required.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they own their appraisal.
Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lending company.
Myth: There's no point for home buyers to even worry about what the report contains so long as their lending institution is fine with the contents therein.
Fact: Only if home buyers examine a copy of their appraisal 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 appraisal makes a near perfect record for future reference, filled with helpful and often-revealing information - 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. An appraiser concludes on an opinion of value in the appraisal process and resulting report. House inspectors will write a report that will determine the condition of the property and its major components and possible damage.