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Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported purchases. Also by law, you are entitled to request a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the opinion of value of the house will vary.

Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.

Myth: Market value will equal replacement cost.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any outside party to purchase or sell. The dollar amount demanded to rebuild a property is what shows the replacement cost.

Myth: There are specific methods that appraisers use to determine the value of a house, such as the price per square foot.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: As properties increase their worth by a specific percentage - in a robust economy - the properties nearby are expected to appreciate by the same amount.

Fact: All increase of value is on a one-on-one basis, concluded by data on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

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Myth: You can generally find what a property is worth simply by looking at the outside.

Fact: House worth is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the property from the outside.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they own their appraisal.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with it by their lending agency.

Myth: Consumers need not worry about what is in their document so long as it exceeds the necessities of their lending group.

Fact: A home buyer should definitely read through their appraisal report; there might be some questions or some worries about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing a great deal of 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: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending company.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot 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: A home inspection serves the same purpose as an appraisal.

Fact: An appraisal report does not serve the same purpose as an inspection. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.