Appraisal myths & facts
Legally, an appraiser is required to be state certified to create legitimate appraisal reports for federally-supported purchase. The law allows you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.
Fact: It might be that Alabama, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why this occurs.
Myth: The opinion of value of a property will change depending upon if the appraisal is provided for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: Any time market value is found, it should equate to the replacement cost of the property.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. If the home were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to come to the price of a house.
Fact: Appraisers make a detailed analysis of all factors in consideration to the value of a house, 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 economic state - the properties in proximity are figured to increase by the same amount.
Fact: Worth increase of a certain property is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It makes no difference whether the economy is excellent or on the decline.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact us
Myth: Just looking at what the house looks like on the outside gives an idea of its worth.
Fact: Home worth is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. However, consumers have to be supplied with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their document so long as it meets the needs of their lending group.
Fact: Only if home buyers examine a copy of their appraisal 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 report that can 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its value estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. The point of a home inspector is to approximate the condition of the property and its major components, then provide a report on their conclusions.