Appraisal myths debunked
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed transactions. You also have the right to receive a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: It might be that Nebraska, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not always true. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the home will vary.
Fact: The value of the property does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the cost of the home. What this means is he will render services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Any time market value is found, it should be similar to the replacement cost of the property.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any external party to purchase or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to determine the price of a property.
Fact: There are many different methods that an appraiser will use to make a full investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable homes.
Myth: In a robust economy - when the values of homes in a given region are found to be rising by a certain percentage - the worth of individual houses in the vicinity can be expected to appreciate by that same percentage.
Fact: All appreciation of value is on a case-by-case basis, concluded by information on relevant conditions and the data of comparable houses. This is true in good economic times as well as bad.
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Myth: You can usually tell what a house is worth simply by looking at the outside.
Fact: There are a number of different factors that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal report.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lending agency.
Myth: Consumers need not be concerned with what is in their appraisal document so long as it exceeds the requirements of their lending group.
Fact: A consumer should definitely read through their appraisal; there will probably be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an incredible amount of information - including, but certainly 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 area.
Myth: Appraisals are ordered only to estimate building values in house sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the property and its major components and reports their findings.