Appraisal myths & facts

It is required by the government that a real estate appraiser is required to be state-licensed to create appraisals for federally-supported real estate transactions in California. You have the ability to request a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value should always be equal to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.

Myth: The opinion of value of a home will be different depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The price of the house does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the value of the house. This means that he will conduct task with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value will approximate replacement cost.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular home, with neither being under duress to buy or sell. The replacement cost is the dollar amount needed to rebuild a property in-kind.

Myth: There are certain methods that appraisers use to find the opinion of value of a house, such as the price per square foot.

Fact: There are many differing formulae that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.

Myth: In a strong economy - when the values of homes in a given area are reported to be rising by a particular percentage - the costs of individual homes in the area can be expected to rise by that same percentage.

Fact: All appreciation of price is on an individual basis, concluded by information on relevant considerations and the data of comparable properties. This is true in fair economic times as well as poor.

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Myth: The home's exterior is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information required.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. However, consumers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even concern themselves with what the report contains so long as their lender is fine with the contents therein.

Fact: Only if home buyers read 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. An report can double as a record for the future, since it contains an incredible amount of information - 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: Appraisals are ordered only to estimate house values in home sales involving mortgage-lending deals.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: An appraisal is the same as a home inspection.

Fact: Appraisal reports have almost nothing in common with a home inspection report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. House inspectors will write a report that will express the condition of the home and its major components and possible damage.