Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-backed purchases. You also have the right to demand a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value should be the same as to market value.
Fact: While most states support the suggestion that assessed value equates estimated market value, this commonly is not the case. There are times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller often will have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The cost of the property does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the worth of the property. Obviously, he will provide job with impartiality and independence regardless for whom the appraisal is created.
Myth: Market value should 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 property without being under duress from any outside group to buy or sell. If the home were rebuilt, the dollar amount required to do so would make up the replacement cost.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to come to the worth of a property.
Fact: There are many differing processes that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable properties.
Myth: As properties appreciate by a specific percentage - in a strong economic state - the houses in proximity are expected to appreciate by the same amount.
Fact: Any cost at which an appraiser arrives concerning a certain property is always personalized, based on certain factors pulled from the information of comparable houses and other specifications within the property itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Shelby County or Cordova, TN?Contact us
Myth: You can generally tell what a property is worth simply by looking at the outside.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the information needed.
Myth: Since the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the document. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given one by their lender.
Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lending agency is fine with the contents therein.
Fact: Only if home buyers examine a copy of their appraisal report can they ensure 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 report makes an excellent record for future reference, filled with useful 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: Appraisers are hired only to estimate building values in property sales involving mortgage-lending transactions.
Fact: Depending upon their qualifications and designations, appraisers can and often do perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting document. The job of a home inspector is to approximate the condition of the house and its main components, then write a report on their findings.