Appraisal myths debunked
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. You have the ability to acquire a copy of the finished appraisal from your lender. Contact Appraise Colorado Inc if you have any concerns about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the idea 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 area have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller can have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should equate to replacement cost.
Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any outside group to purchase or sell. Replacement value is the dollar amount needed to reconstruct a home in-kind.
Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to ascertain the cost of a home.
Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to some facilities, the condition of the property and the price of recent comparable sales. You can rely on Appraise Colorado Inc's appraisers to be ethical in assessing this data.
Myth: As homes increase their worth by a specific percentage - in a strong economy - the properties nearby are figured to appreciate by the same amount.
Fact: Value increase of a certain house is always determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It doesn't matter if the economy is on the rise or declining.
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Myth: You can commonly tell what a property is worth simply by looking at the exterior.
Fact: To determine an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be derived simply by examining the house from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. Home buyers must be supplied with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.
Fact: It is almost imperative for consumers to read a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an exorbitant amount of 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 area.
Myth: Appraisals are ordered only to estimate home values in house sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you order a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser finds an opinion of value in the appraisal process and resulting document. A home inspector analyzes the condition of the house and its major components and reports these findings.