Appraisal myths debunked
Legally, an appraiser needs to be state certified to write legitimate real estate appraisals for federally-supported sales. The law entitles you to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the property will vary.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under duress to buy or sell. The dollar amount required to reconstruct a home is what forms the replacement cost.
Myth: There are specific ways that appraisers use to show the cost of a property, such as the price per square foot.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a powerful economy - when the values of properties in a given area are found to be increasing by a certain percentage - the worth of individual properties in the area can be expected to increase by that same percentage.
Fact: All increase of price is on an individual basis, concluded by data on relevant considerations and the data of comparable houses. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Meade County or Piedmont, South Dakota?Contact our professional staff
Myth: You can usually see what a home is worth simply by looking at the outside.
Fact: To find an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the house from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance real estate, they own their appraisal report.
Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lending agency.
Myth: Consumers need not be concerned with what is in their document so long as it meets the needs of their lending institution.
Fact: It is very important for consumers to peruse a copy of their report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an report that could be useful to the home buyer in the future, such as 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 cost estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection report. The job of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will write a report that will explain the condition of the home and its major components and possible damage.