Common myths about appraising
By law, an appraiser must be state-licensed to offer appraisals for federally-supported transactions. You are also entitled by law to acquire a copy of the finished appraisal report from your lender. Contact Homeowner Appraisal Services if you have any questions about the appraisal procedure.
Myth: Market value has to be the same as the assessed value of the property.
Fact: It is possible that Florida, like most states, supports the common myth that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why the price can vary.
Myth: The buyer or the seller sometimes may have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be similar to the replacement cost of the home.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under duress to buy or sell. The dollar amount needed to rebuild a home is what shows the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the worth of a property.
Fact: There are many different processes that an appraiser will use to make a comprehensive analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable houses.
Myth: When the economy is doing well and the sales prices of properties are reported to be rising by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.
Fact: All appreciation of worth is on a one-on-one basis, concluded by data on relevant conditions and the data of comparable houses. This is true in fair economic times as well as bad.
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Myth: Just examining what the house looks like on the outside gives a good idea of its cost.
Fact: Property worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data needed.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, home buyers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their report so long as it satisfies the needs of their lending institution.
Fact: A consumer should definitely read through their report; there might be some questions or some concerns with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an exorbitant 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: Appraisers are hired only to estimate home values in home sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection.
Fact: Appraisal reports are nothing like a home inspection. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. A home inspector determines the condition of the home and its major components and reports these findings.