Common myths about appraising
Legally, an appraiser has to be state certified to create substantiated appraisal reports for federally-backed transactions. You also have the right to request a copy of the completed report from your lender. Contact Walz Appraisal Service, LLC if you have any concerns about the appraisal procedure.
Myth: Market value should be the same as the assessed value of the property.
Fact: While most states uphold the idea that assessed value equates estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The buyer or the seller often will have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: The opinion of value of the home does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the cost of the home. What this means is he will conduct services with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under duress from any outside party to buy or sell. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: Certain methods, such as the price per square foot, are what appraisers use to ascertain the price of a house.
Fact: An appraisal is an amalgamation of data based on the house's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can rely on Walz Appraisal Service, LLC's appraisers to be forthright in assessing this information.
Myth: As properties increase their worth by a specific percentage - in a robust economy - the properties within the same neighborhood are expected to increase by the same amount.
Fact: All increase of price is on an individual basis, determined by data on relevant considerations and the data of comparable homes. This is true in good economic times as well as bad.
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Myth: Just seeing what the house looks like on its exterior gives an idea of its value.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by inspecting the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your home, you own the provided appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lender.
Myth: There's no reason for consumers to even care about what the appraisal contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely read through their report; there might be some questions or some worries about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal 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 region.
Myth: Appraisers are hired only to assess real estate property values in home sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and will perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: Appraisal reports are nothing like a home inspection. An appraiser finds an opinion of value in the appraisal process and resulting appraisal. The purpose of a home inspector is to determine the condition of the home and its major components, then write a report on their inspection.