Common myths about appraising
It is required by law that an appraiser needs to be state-licensed to offer appraisals for federally-related real estate sales in Alabama. You also have the right to demand a copy of the completed appraisal report from your lending agency. Contact Shamrock Appraisals, Inc. if you have any questions about the appraisal procedure.
Myth: Market value must be the same as the assessed value of the property.
Fact: While most states support the suggestion that assessed value equates estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged time.
Myth: The buyer or the seller can have some pull in the value of the home depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. The dollar amount needed to reconstruct a property is what shows the replacement cost.
Myth: There are certain ways that appraisers use to find the cost of a home, such as the price per square foot.
Fact: There are many numerous methods that an appraiser will use to make a comprehensive investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses.
Myth: In a robust economy - when the prices of houses in a given region are reported to be appreciating by a certain percentage - the worth of individual properties in the area can be expected to appreciate by that same percentage.
Fact: Any value at which an appraiser concludes in regards to a specific house is always individualized, based on certain factors found from the information of comparable houses and other specifications within the house itself. It doesn't matter if the economy is doing well or declining.
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Myth: The home's exterior is determinate of the actual price of the property; there is no need to do an interior inspection.
Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the house from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your home, you own the ordered appraisal.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. However, home buyers have to be given a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal so long as it meets the necessities of their lending institution.
Fact: It is a very good idea for home buyers to read a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, comprised of helpful 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its worth estimated in a lender sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will write a report that will show the condition of the property and its major components and possible damage.