Common myths about appraising
Legally, a real estate appraiser needs to be state certified to perform legitimate real estate appraisals for federally-backed transactions. You also have the right to receive a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value will be the same as the assessed value of the property.
Fact: It could be that South Carolina, like most states, validates the common myth that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are excellent examples of why this occurs.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraised value of the home does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the cost of the home. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is created.
Myth: Any time market value is found, it should equal the replacement cost of the house.
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 influence from any external group to buy or sell. If the home were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are what appraisers use to ascertain the worth of a home.
Fact: Appraisers make a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: When the economy is doing well and the cost of houses are reported to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Fact: Any worth at which an appraiser arrives concerning a specific house is always individualized, based on certain factors pulled from the data of comparable properties and other specifications within the property itself. It makes no difference whether the economy is excellent or terrible.
Have other questions about appraisers, appraising or real estate in Lexington County or West Columbia, SC?Contact our professional staff
Myth: You can usually tell what a house is worth simply by looking at the exterior.
Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by viewing the house from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance real estate, they legally own their appraisal.
Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the document. However, home buyers must be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the necessities of their lending agency.
Fact: It is almost imperative for consumers to check over a copy of their report so that they can verify the accuracy of the document, in case there is a need to question its accuracy. 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, filled with helpful and often-revealing 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 proximity.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal 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. The purpose of a home inspector is to assess the condition of the house and its major components, then compose a report on these conclusions.
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