Common myths about appraising
It is enforced by law that a real estate appraiser needs to be state-licensed to create appraisal reports for federally-supported real estate sales in California. You are also entitled by law to receive a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value will be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller will have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Any time market value is established, it should equal the replacement cost of the property.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular house, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to reconstruct a house in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a home.
Fact: Appraisers make a comprehensive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As homes appreciate by a certain percentage - in a strong economy - the properties in proximity are expected to appreciate by the same amount.
Fact: Any worth at which an appraiser arrives in regards to a specific house is always individualized, based on certain factors concluded from the data of comparable houses and other considerations within the house itself. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in SW Riverside County or Hemet, CA?Contact our professional staff
Myth: The home's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior appraisal.
Fact: Home worth is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived simply by inspecting the house from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their home, they own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with it by their lending company.
Myth: Home buyers need not worry about what is in their appraisal report so long as it satisfies the necessities of their lending institution.
Fact: Only if consumers look at a copy of their report can they double-check 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 appraisal report that should be useful to the consumer 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending company.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't need to get an appraisal if you order a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. A home inspector assesses the condition of the house and its major components and reports their findings.