Appraisal myths & facts
It is enforced by law that a real estate appraiser must be state-licensed to produce appraisal reports for federally-related home transactions in Alabama. Also by law, you have the right to receive a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: It is possible that Alabama, like most states, validates the idea that the assessed value is the same as the market value; however, this is not always true. Usually when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller can have an influence in the value of the house depending upon for whom the appraiser is working.
Fact: The cost of the house does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the value of the property. Obviously, he will conduct job with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Market value should equate to replacement cost.
Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any external party to buy or sell. Replacement cost is the dollar amount needed to rebuild a home in-kind.
Myth: There are certain ways that real estate appraisers use to show the value of a house, like the price per square foot.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a strong economy - when the sales prices of homes in a given county are found to be increasing by a particular percentage - the prices of individual houses in the area can be expected to rise by that same percentage.
Fact: Price appreciation of a certain house must be determined on an individualized basis, factoring in information on comparable houses and other relevant considerations. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact Shamrock Appraisals, Inc.
Myth: Just seeing what the home looks like on its exterior gives an excellent idea of its worth.
Fact: House value is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data needed.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. However, home buyers must be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lending agency.
Fact: Only if home buyers examine a copy of their appraisal 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. Also, the appraisal makes a valuable record for future reference, comprised of useful and often-revealing data - including 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 area.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. An appraiser forms an opinion of value in the appraisal process and resulting report. House inspectors will create a report that will determine the condition of the property and its major components and possible damage.