Appraisal myths debunked
Legally, a real estate appraiser has to be state certified to produce substantiated real estate appraisals for federally-backed transactions. Also by law, you have the ability to request a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should always be similar to to market value.
Fact: While most states back the idea that assessed value is equal to estimated market value, this usually is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are exact examples of why this occurs.
Myth: The value of a home will vary depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the cost of a home.
Fact: There are many numerous calculations that an appraiser will use to make a detailed investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable houses.
Myth: When the economy is strong and the value of houses are found to be rising by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser concludes in regards to a certain property is always personalized, based on certain factors concluded from the information of comparable homes and other specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Lexington County or West Columbia, SC?Contact us
Myth: You can often see what a house is worth simply by looking at the exterior.
Fact: House worth is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by viewing the home from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with one by their lender.
Myth: Home buyers need not care about what is in their appraisal so long as it meets the needs of their lending company.
Fact: It is very important for consumers to go through a copy of their report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal 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 area.
Myth: Appraisers are hired only to assess house values in house sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you order a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal. A home inspector assesses the condition of the property and its main components and reports their findings.
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