Common myths about appraising
It is required by legal agencies that an appraiser is required to be state-licensed to perform appraisals for federally-supported real estate transactions in Florida. You are also entitled by law to demand a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value should always be equal to market value.
Fact: While most states back the idea that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.
Myth: The opinion of value of a property will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the property.
Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under duress from any outside group to purchase or sell. The dollar amount demanded to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the worth of a property.
Fact: There are many numerous calculations that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable houses.
Myth: When the economy is doing well and the cost of homes are reported to be rising by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser concludes concerning a specific home is always personalized, based on certain factors found from the data of comparable homes and other considerations within the house itself. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Broward County or Weston/Ft. Lauderdale, FL?Contact us
Myth: The home's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Fact: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by looking at the home from the outside.
Myth: Considering that 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, by law the appraisal report belongs to them.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Home buyers have to be provided with a version of the document upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the requirements of their lender.
Fact: A home buyer should definitely read through their appraisal; there may be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an report that should 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its cost assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. House inspectors will write a report that will show the condition of the home and its major components and possible damage.