Appraisal myths debunked

It is mandated by law that an appraiser must be state-licensed to produce appraisal reports for federally-related home purchases in California. Also by law, you are allowed to receive a copy of the completed appraisal report from your lending agency. Contact Appraisal-One if you have any concerns about the appraisal process.

Myth: Assessed value will always be the same as to market value.

Fact: While most states back the suggestion that assessed value equates estimated market value, this often is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period.

Myth: The value of a house will differ depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The value of the house does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the value of the home. What this means is he will complete his job with impartiality and independence regardless for whom the appraisal is conducted.

Myth: The replacement cost of the house will be is on par with the market value.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.

Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to ascertain the price of a house.

Fact: There are many different formulae that an appraiser will use to make an in-depth investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable houses.

Myth: As properties appreciate by a specific percentage - in a strong economy - the houses within the same neighborhood are figured to increase by the same amount.

Fact: Worth increase of a specific property must be determined on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It makes no difference whether the economy is robust or on the decline.

Myth: You can usually tell what a property is worth simply by looking at the exterior.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just looking at the house from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your home, you own the provided appraisal report.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be supplied with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.

Fact: It is very important for home buyers to read a copy of their report so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing useful and often-revealing information - including 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 proximity.