Appraisal myths debunked
It is enforced by legal agencies that an appraiser needs to be state-licensed to perform appraisals for federally-supported real estate transactions in New York. Also by law, you are allowed to demand a copy of the completed report from your lender. Contact Queens Appraisal Services if you have any questions about the appraisal process.
Myth: The value that is assessed 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. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby houses are perfect examples of why the price can vary.
Myth: The value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraised value of the home does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the cost of the home. Obviously, he will complete his job with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement cost is the dollar amount required to reconstruct a home in-kind.
Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to come to the price of a house.
Fact: There are many varied processes that an appraiser will use to make a comprehensive analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses.
Myth: When the economy is on the rise and the sales prices of properties are found to be increasing by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.
Fact: Any cost at which an appraiser concludes concerning a specific house is always individualized, based on certain factors pulled from the information of comparable houses and other considerations within the property itself. It makes no difference if the economy is strong or bad.
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Myth: You can usually see what a house is worth simply by looking at the outside.
Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the information required.
Myth: Because the consumer is the one who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given one by their lending agency.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending company is satisfied.
Fact: Only if consumers check out a copy of their appraisal 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. 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide 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 report.
Fact: Appraisal reports have almost nothing in common with a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting document. House inspectors will create a report that will explain the condition of the home and its major components and possible damage.