Appraisal myths & facts
By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported purchases. The law allows you to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value should be the same as to market value.
Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why this occurs.
Myth: The value of a house will differ depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the property is always is on par with the market value.
Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain property, with neither being under pressure to buy or sell. The dollar amount necessary to rebuild a home is what forms the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to come to the value of a house.
Fact: There are many differing ways that an appraiser will use to make a full analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.
Myth: In a powerful economy - when the costs of homes in a given region are found to be rising by a particular percentage - the values of individual properties in the area can be expected to increase by that same percentage.
Fact: Cost appreciation of a specific house must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Arapahoe County or Parker, CO?Contact Appraise Colorado Inc
Myth: The house's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data necessary.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance real estate, they legally own their appraisal.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Consumers have to be provided with a copy of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the necessities of their lending company.
Fact: Only if consumers check out a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an appraisal that should 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its cost assessed in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot 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: An appraisal is no different than a home inspection report.
Fact: A home inspection report has a completely different purpose than an appraisal report. The appraiser concludes on an opinion of value in the appraisal process and resulting document. A home inspector determines the condition of the property and its major components and reports these findings.