Appraisal myths & facts
It is mandated by law that an appraiser is required to be state-licensed to write appraisal reports for federally-supported home purchases in California. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Sometimes 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 a good length of time, it may vary wildly.
Myth: The buyer or the seller sometimes may have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: The price of the home does not affect the payment of the appraiser; as such, the appraiser has no personal interest in the opinion of value of the house. This means that he will complete his services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will equate to replacement cost.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any external group to purchase or sell. The dollar amount required to reconstruct a home is what constitutes the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the value of a house, like the price per square foot.
Fact: Appraisers make a comprehensive analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is doing well and the sales prices of properties are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Fact: Any worth at which an appraiser arrives in regards to a certain home is always personalized, based on certain factors found from the information of comparable houses and other specifications within the house itself. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Orange County or Mission Viejo, CA?Contact Premier Appraisal of SoCal
Myth: Just examining what the house looks like on its exterior gives a good idea of its worth.
Fact: Property value is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found simply by viewing the home from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their house, they own their appraisal.
Fact: Legally, the document is owned by the lending agency unless the lender releases their interest in the report. However, consumers must be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lending agency.
Fact: Only if consumers check out a copy of their report can they ensure 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, filled with helpful and often-revealing information - 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: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending company.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you order a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The job of the appraiser is to find an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the building and its major components and reports their findings.