Appraisal myths debunked
Legally, a real estate appraiser has to be state certified to produce legitimate real estate appraisals for federally-related sales. Also by law, you have the right to demand a copy of the completed report from your lending agency. Contact Premier Appraisal of SoCal if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser will be equivalent to the market value.
Fact: It is probable that California, like most states, supports the common myth that the assessed value equates to the market value; however, this is not always true. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The value of a home will change depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement value of the property will be is on par with the market value.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under duress to buy or sell. Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: Certain methods, like the price per square foot of the property, are the methods appraisers use to arrive at the value of a house.
Fact: There are many different methods that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.
Myth: When the economy is robust and the worth of properties are found to be appreciating by a certain percentage, the other houses in the proximity can be expected to increase based on that same percentage.
Fact: All increase of worth is on a case-by-case basis, concluded by information on relevant elements and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact Premier Appraisal of SoCal
Myth: You can generally find what a home is worth simply by looking at the exterior.
Fact: There are a number of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information necessary.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their house, they legally own their appraisal report.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be given it by their lending agency.
Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending institution is satisfied.
Fact: It is very important for consumers to go through a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains an exorbitant amount of data - including, but 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending agency.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude 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: There's no reason to get an appraisal if you order a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal report. The task of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the building and its major components and reports their findings.