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Appraisal myths & facts

Legally, a real estate appraiser is required to be state certified to perform legitimate real estate appraisals for federally-supported sales. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact Levison Appraisal Company if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser will be equivalent to the market value.

Fact: It is probable that Missouri, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are prime examples of why there might be a differential in price.

Myth: Depending on if the appraisal is done for the buyer or the seller, the cost of the property will vary.

Fact: The appraiser has no vested interest in the result of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is found, it should equate to the replacement cost of the house.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside group to buy or sell. If the home were reconstructed, the dollar amount needed to do so would be the replacement cost.

Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to ascertain the worth of a house.

Fact: There are many varied ways that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable homes.

Myth: As houses appreciate by a specific percentage - in a strong economic state - the houses around the appreciating properties are expected to appreciate by the same amount.

Fact: Any cost at which an appraiser concludes concerning a specific property is always personalized, based on certain factors derived from the information of comparable houses and other considerations within the house itself. It makes no difference whether the economy is robust or poor.

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Myth: Just examining what the house looks like on the outside gives a good idea of its value.

Fact: Property worth is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.

Myth: Since the consumer is the party who provides the money 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 lending agency unless the lender relinquishes their interest in the report. However, home buyers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal document so long as it exceeds the necessities of their lending group.

Fact: A consumer should definitely read through their appraisal report; there may be some questions or some worries with the accuracy of the analysis that should be addressed. 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, comprised of useful and often-revealing data - 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 vicinity.

Myth: The only reason someone would order an appraisal is if a house needs its cost estimated in a lender-based sales transaction.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: You don't have to get an appraisal if you order a home inspection.

Fact: An appraisal report does not fulfill the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process and resulting document. House inspectors will produce a report that will express the condition of the house and its major components and possible damage.