Appraisal myths & facts
Legally, a real estate appraiser has to be state certified to write legitimate appraisal reports for federally-backed transactions. You are also entitled by law to request a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: While most states uphold the idea that assessed value equates estimated market value, this usually is not the case. At times when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller may have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under duress from any external group to buy or sell. The replacement cost is the dollar amount required to rebuild a home in-kind.
Myth: There are specific methods that real estate appraisers use to show the value of a house, such as the price per square foot.
Fact: An appraisal report is a collection of information based on the property's size, location, proximity to some facilities, the condition of the property and the cost of recent comparable sales. You can count on Anderson Appraisal, LLC's staff to be honest in assessing this data.
Myth: In a powerful economy - when the values of houses in a given region are reported to be appreciating by a certain percentage - the costs of individual homes in the vicinity can be expected to increase by that same percentage.
Fact: Worth appreciation of a specific property has to be determined on an individualized basis, factoring in data on comparable houses and other relevant specifications within the house itself. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Potter County or Amarillo, Texas?Contact our professional staff
Myth: Just seeing what the house looks like on its exterior gives an excellent idea of its cost.
Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by looking at the home from the exterior.
Myth: Considering that the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. However, home buyers have to be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending institution is satisfied.
Fact: A consumer should definitely inspect their appraisal report; there could be some questions or some concerns 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. There is an incredible amount of data stored in an appraisal report that should 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 region.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a property during a sales transaction involving a lender.
Fact: Depending upon their qualifications and designations, appraisers can and often do perform a variety 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: Appraisal reports are definitely not the same as a home inspection report. The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the property and its main components and reports these findings.