Common myths about appraising
It is required by legal agencies that a real estate appraiser is required to be state-licensed to produce appraisal reports for federally-supported home sales in Florida. You are also entitled by law to demand a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value should equate to market value.
Fact: It is possible that Florida, like most states, validates the common myth 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 has not investigated and a lack of reassessment on nearby homes are exact examples of why the price can vary.
Myth: The buyer or the seller may have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount required to rebuild a house is what constitutes the replacement cost.
Myth: There are certain ways that appraisers use to determine the cost of a home, such as the price per square foot.
Fact: An appraisal is a collection of information based on the property's size, location, proximity to certain facilities, the condition of the property and the worth of recent comparable sales. You can depend on DANIEL I KANDEL's staff to be forthright in assessing this information.
Myth: In a strong economy - when the costs of homes in a given county are reported to be appreciating by a certain percentage - the prices of individual houses in the proximity can be expected to rise by that same percentage.
Fact: Any value at which an appraiser concludes in regards to a certain property is always individualized, based on certain factors pulled from the information of comparable houses and other specifications within the house itself. It doesn't matter if the economy is on the rise or declining.
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Myth: Just examining what the home looks like on its exterior gives an excellent idea of its value.
Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from just viewing the home from the outside.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with one by their lending agency.
Myth: Consumers need not be concerned with what is in their document so long as it satisfies the necessities of their lending institution.
Fact: A consumer should definitely inspect their report; there might be some questions or some concerns about 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, containing a great deal of information - including, but 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.
Myth: The only reason someone would order an appraisal is if a property needs its cost estimated in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a lot 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: An appraisal report is the same as a home inspection report.
Fact: Appraisal reports are completely different than a home inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting report. The purpose of a home inspector is to assess the condition of the property and its main components, then produce a report on their findings.