Appraisal myths debunked
It is enforced by law that a real estate appraiser is required to be state-licensed to write appraisal reports for federally-supported property sales in Nebraska. Also by law, you have the ability to request a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value should be similar to to market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why there might be a differential in price.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Fact: The price of the home does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the value of the property. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is created.
Myth: Market value will equal replacement cost.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to come to the cost of a house.
Fact: An appraisal is an assertion of information concluded from the home's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can rely on Saxton Appraisals, Inc.'s staff to be forthright in assessing this information.
Myth: As houses appreciate by a certain percentage - in a strong economic state - the homes in proximity are expected to appreciate by the same amount.
Fact: Any price at which an appraiser arrives in regards to a particular home is always individualized, based on certain factors pulled from the information of comparable properties and other considerations within the property itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Douglas County or Omaha, NE?Contact us
Myth: You can often find what a home is worth simply by looking at the exterior.
Fact: There are a multitude of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the property from the exterior.
Myth: Because the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the report. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with one by their lending agency.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it satisfies the requirements of their lending company.
Fact: Only if home buyers look at a copy of their appraisal 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. There is an incredible amount of information stored in an appraisal 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its cost assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The appraiser finds an opinion of value in the appraisal process and resulting appraisal report. A home inspector assesses the condition of the home and its main components and reports these findings.