Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-backed purchases. The law entitles you to receive a copy of your finished appraisal from your lending agency after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value should always be the same as to market value.
Fact: While most states uphold the concept that assessed value is equal to estimated market value, this generally is not the case. Sometimes when interior remodeling has been done 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 buyer or the seller will have some pull in the cost of the home depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Any time market value is found, it should be the same as the replacement cost of the house.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any outside group to purchase or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the cost of a home.
Fact: An appraisal is a collection of information based on the home's size, location, proximity to undesirable facilities, the condition of the house and the value of recent comparable sales. You can rely on Herrin Appraisal Company's staff to be professional in assessing this information.
Myth: When the economy is on the rise and the cost of homes are reported to be rising by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.
Fact: All increase of price is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable properties. It makes no difference whether the economy is good or bad.
Have other questions about appraisers, appraising or real estate in Forsyth County or Clemmons, NC?Contact Herrin Appraisal Company
Myth: The home's exterior is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
Fact: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the home from the outside.
Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be supplied with a copy of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending company is fine with the contents therein.
Fact: Only if home buyers check out a copy of their appraisal 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. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing information - including 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: Appraisers are hired only to assess house values in home sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a series 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: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The reason behind an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal report. The point of a home inspector is to determine the condition of the home and its main components, then write a report on these findings.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.