Common myths about appraising

Legally, a real estate appraiser needs to be state certified to perform legitimate appraisal reports for federally-supported sales. The law allows you to receive a copy of your completed appraisal report from your lender after it has been produced. Contact Mavericks Real Estate Group if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why this occurs.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.

Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount needed to reconstruct a house is what forms the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to come to the value of a property.

Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the worth of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: In a robust economy - when the sales prices of properties in a given region are reported to be rising by a particular percentage - the costs of individual properties in the area can be expected to increase by that same percentage.

Fact: All appreciation of price is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable houses. It makes no difference if the economy is good or terrible.

Myth: The house's outside is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information required.

Myth: Because the consumer is the person who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be provided with a version of the appraisal report through request because of the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.

Fact: A home buyer should definitely read through their appraisal; there could be some questions or some worries with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, since it contains a great deal of data - 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 proximity.