Appraisal myths & facts
By law, an appraiser needs to 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 from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be similar to to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.
Myth: The buyer or the seller sometimes may have leverage in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should equate to replacement cost.
Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any external party to purchase or sell. Replacement cost is the dollar amount needed to rebuild a property in-kind.
Myth: There are certain methods that appraisers use to show the opinion of value of a home, such as the price per square foot.
Fact: There are many different formulae that an appraiser will use to make a detailed investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable properties.
Myth: In a powerful economy - when the prices of homes in a given area are found to be increasing by a certain percentage - the worth of individual houses in the proximity can be expected to increase by that same percentage.
Fact: Any price at which an appraiser arrives in regards to a particular house is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the house itself. It makes no difference if the economy is good or poor.
Have other questions about appraisers, appraising or real estate in Comanche County or Lawton, OK?Contact us
Myth: You can usually find what a house is worth simply by looking at the outside.
Fact: Property worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply viewing the house from the outside.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their home, they own their appraisal.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. Home buyers must be given a version of the report through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal document so long as it satisfies the necessities of their lending institution.
Fact: A home buyer should definitely inspect their appraisal; there may be some questions or some worries with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, comprised of helpful and often-revealing data - 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 proximity.
Myth: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you order a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The function of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the report. A home inspector analyzes the condition of the house and its major components and reports their findings.