Appraisal myths & facts
By law, an appraiser must be state-licensed to perform appraisals for federally-backed sales. You also have the right to request a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: While most states uphold the idea that assessed value equates estimated market value, this generally is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The buyer or the seller may have an influence in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell. Replacement cost is the dollar amount needed to rebuild a home in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the worth of a home.
Fact: An appraisal report is an amalgamation of information concluded from the house's size, location, proximity to specific facilities, the condition of the home and the price of recent comparable sales. You can depend on Mueller Appraisal Services's staff to be professional in assessing this information.
Myth: When the economy is strong and the sales prices of homes are found to be rising by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Fact: Value appreciation of a certain home is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. It makes no difference if the economy is strong or on the decline.
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Myth: The home's outside is determinate of the actual price of the house; it is unnecessary to do an interior inspection.
Fact: House value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by viewing the home from the exterior.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their house, they legally own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Home buyers must be given a copy of the document upon written request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal so long as it satisfies the requirements of their lending company.
Fact: It is a very good idea for consumers to look at a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an incredible amount of data - including, but certainly not limited to 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 house during a sales transaction involving a lender.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection.
Fact: Appraisal reports are nothing like a home inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting report. The task of a home inspector is to approximate the condition of the house and its main components, then provide a report on their inspection.