Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-related purchase. You have the ability to demand a copy of the finished appraisal report from your lending agency. Contact M Davies Appraisal LLC if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. At times when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the house will vary.

Fact: The appraiser has no personal interest in the result of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement value is the dollar amount needed to reconstruct a house in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the cost of a home.

Fact: An appraisal report is an amalgamation of data concluded from the house's size, location, proximity to specific facilities, the condition of the house and the cost of recent comparable sales. You can depend on M Davies Appraisal LLC's appraisers to be ethical in assessing this data.

Myth: In a strong economy - when the values of homes in a given neighborhood are found to be increasing by a certain percentage - the values of individual homes in the proximity can be expected to increase by that same percentage.

Fact: Any cost at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just looking at what the house looks like on its exterior gives a good idea of its cost.

Fact: Property worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information necessary.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance real estate, you own the produced appraisal report.

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. Because of the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be provided with it by their lender.

Myth: There's no need for consumers to even care about what the report contains so long as their lending agency is fine with the contents therein.

Fact: A home buyer should definitely look through their appraisal; there will probably be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of data - 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 area.