Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported sales. The law allows you to acquire a copy of your finished report from your lender after it has been produced. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be the same as the 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 remodeling has occurred and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller often will have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: The cost of the home does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the opinion of value of the house. Obviously, he will render services with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Any time market value is established, it should equate to the replacement cost of the property.
Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under influence from any outside group to purchase or sell. Replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: There are certain ways that real estate appraisers use to determine the value of a home, such as the price per square foot.
Fact: An appraisal is an amalgamation of information based on the house's size, location, proximity to undesirable facilities, the condition of the house and the worth of recent comparable sales. You can rely on Valiant Appraisal Services's appraisers to be ethical in assessing this data.
Myth: In a strong economy - when the costs of houses in a given area are found to be appreciating by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.
Fact: Any value at which an appraiser arrives concerning a certain property is always personalized, based on certain factors found from the data of comparable properties and other considerations within the property itself. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in or near Philadelphia?Contact us
Myth: Just examining what the property looks like on the outside gives an idea of its value.
Fact: There are a number of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by viewing the property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with one by their lending company.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending institution is satisfied.
Fact: Only if consumers look through a copy of their appraisal 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. Also, the report makes an excellent record for future reference, comprised of useful and often-revealing information - 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 proximity.
Myth: Appraisals are ordered only to estimate building values in home sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and will provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will express the condition of the house and its major components and possible damage.