Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed transactions. You have the ability to demand a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Market value will be the same as the assessed value of the property.
Fact: While most states support the suggestion that assessed value equates estimated market value, this generally is not the case. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The opinion of value of a house will vary depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the home will be is on par with the market value.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under influence from any outside party to buy or sell. If the property were rebuilt, the dollar amount necessary to do so would be the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are the methods appraisers use to arrive at the cost of a property.
Fact: There are many differing formulae that an appraiser will use to make a detailed analysis 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: When the economy is robust and the cost of properties are found to be appreciating by a certain percentage, the other properties in the area can be expected to appreciate based on that same percentage.
Fact: Any value at which an appraiser concludes concerning a specific house is always individualized, based on certain factors pulled from the information of comparable houses and other specifications within the property itself. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Saint Louis County or Chesterfield, MO?Contact us
Myth: Just looking at what the home looks like on the outside gives an idea of its worth.
Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply examining the property from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal report.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be provided with a copy of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the necessities of their lending company.
Fact: Only if home buyers check out a copy of their appraisal report can they verify 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 data stored in an appraisal report that could be useful to the consumer 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 house needs its worth estimated in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal report. An appraiser decides upon an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the building and its major components and reports their findings.