Appraisal myths & facts
Legally, an appraiser must be state certified to perform legitimate real estate appraisals for federally-backed transactions. The law gives you the right to receive a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any questions about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: While most states uphold the idea that assessed value is equal to estimated market value, this commonly is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged time.
Myth: The buyer or the seller will have some pull in the value of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should approximate replacement cost.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any external group to buy or sell. If the home were rebuilt, the dollar amount necessary to do so would be the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the value of a house, such as the price per square foot.
Fact: Appraisers make a full analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: When the economy is robust and the cost of houses are reported to be increasing by a certain percentage, the other homes in the vicinity can be expected to rise based on that same percentage.
Fact: Price increase of a specific house has to be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant considerations. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Dekalb County or Decatur, GA?Contact us
Myth: You can often find what a house is worth simply by looking at the outside.
Fact: To conclude an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by looking at the house from the outside.
Myth: Because the consumer is the person who provides 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 document is owned by the lender unless the lender releases their interest in the document. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be provided with one by their lending company.
Myth: Consumers need not care about what is in their document so long as it meets the needs of their lending company.
Fact: Only if consumers examine 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 a great deal of information contained in an appraisal that could be useful to the home buyer 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 order an appraisal is if a home needs its cost estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are completely different than a home inspection. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the report. A home inspector analyzes the condition of the home and its main components and reports these findings.