Common myths about appraising
By law, an appraiser must be state-licensed to produce appraisals for federally-supported sales. Also by law, you have the right to request a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
Fact: It might be that Florida, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. At times when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the home will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to come to the worth of a property.
Fact: There are many varied methods that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable homes.
Myth: In a strong economy - when the sales prices of houses in a given region are found to be increasing by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.
Fact: All appreciation of price is on a case-by-case basis, concluded by data on relevant conditions and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
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Myth: The house's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.
Fact: To find an accurate worth beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by inspecting the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending agency.
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. An appraisal report can serve as a record for the future, since it contains an exorbitant amount of data - 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 area.
Myth: The only reason someone would order an appraisal is if a house needs its price estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but 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 have had a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the building and its major components and reports their findings.