Appraisal myths debunked

Legally, a real estate appraiser is required to be state certified to perform legitimate appraisal reports for federally-backed purchase. Also by law, you have the right to demand a copy of the completed appraisal report from your lender. Contact All City Appraisal if you have any questions about the appraisal procedure.

Myth: Assessed value should always be equal to market value.

Fact: It is possible that California, like most states, validates the idea that the assessed value is the same as the market value; however, this is not often the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: The opinion of value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.

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 value of the home should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount necessary to reconstruct a house in-kind.

Myth: There are certain ways that appraisers use to show the value of a house, like the price per square foot.

Fact: There are many differing methods that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable properties.

Myth: As properties appreciate by a certain percentage - in a robust economic state - the homes nearby are figured to increase by the same amount.

Fact: Worth increase of a specific property must be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.

Myth: Just examining what the property looks like on the outside gives an idea of its worth.

Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by inspecting the property from the exterior.

Myth: Because the consumer is the one who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. Home buyers have to be provided with a copy of the document through request because of the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.

Fact: Only if consumers look at a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an report that can 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.