Appraisal myths & facts
By law, an appraiser must be state-licensed to perform appraisals for federally-supported sales. You also have the right to demand a copy of the finished report from your lending agency. Contact Saxton Appraisals, Inc. if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser will 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. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are prime examples of why there might be a differential in price.
Myth: The buyer or the seller sometimes may have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the property.
Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement value is the dollar amount needed to reconstruct a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to come to the value of a home.
Fact: An appraisal report is an assertion of data concluded from the home's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can count on Saxton Appraisals, Inc.'s staff to be professional in assessing this information.
Myth: As houses increase their worth by a specific percentage - in a robust economic state - the properties within the same neighborhood are figured to appreciate by the same amount.
Fact: Any price at which an appraiser arrives concerning a certain house is always personalized, based on certain factors found from the data of comparable properties and other considerations within the home itself. It makes no difference whether the economy is robust or bad.
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Myth: Just looking at what the property looks like on the outside gives an idea of its cost.
Fact: House worth is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the house from the outside.
Myth: Because the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the document. Consumers must be supplied with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the needs of their lender.
Fact: Only if consumers look through a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal report that should be useful to the consumer in the future, such as 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 hire an appraiser is if a house needs its price estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. The purpose of a home inspector is to determine the condition of the home and its major components, then produce a report on these findings.