Common myths about appraising
Legally, an appraiser is required to be state certified to create legitimate appraisal reports for federally-related transactions. The law allows you to receive a copy of your completed 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 will always be similar to to market value.
Fact: It is possible that Florida, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not often the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller may have some pull in the value of the property depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should be similar to the replacement cost of the property.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. Replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: There are specific methods that appraisers use to find the value of a house, such as the price per square foot.
Fact: There are many different ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable properties.
Myth: In a powerful economy - when the prices of houses in a given county are reported to be appreciating by a certain percentage - the costs of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Price increase of a certain house has to be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It makes no difference whether the economy is excellent or bad.
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Myth: Just seeing what the property looks like on its exterior gives an idea of its worth.
Fact: Property value is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the home from the exterior.
Myth: Considering that the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Consumers have to be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lending agency.
Fact: A home buyer should definitely read through their appraisal; there may be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an report that can be useful to the consumer 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: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The task of the appraiser is to find an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the building and its main components and reports these findings.
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