Appraisal myths & facts
By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed transactions. Also by law, you have the ability to receive a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value will always equate to market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a house will be different depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should be similar to the replacement cost of the property.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.
Myth: There are certain methods that real estate appraisers use to show the value of a home, such as the price per square foot.
Fact: An appraisal report is a collection of information concluded from the home's size, location, proximity to specific facilities, the condition of the home and the worth of recent comparable sales. You can depend on Southeastern Valuation, LLC's appraisers to be professional in assessing this information.
Myth: When the economy is strong and the worth of properties are found to be increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.
Fact: Value increase of a certain home must be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Jefferson, Shelby, Saint Clair, Calhoun, Blount and Talladega Counties?Contact us
Myth: You can usually find what a house is worth simply by looking at the outside.
Fact: Property value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by inspecting the house from the outside.
Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, home buyers have to be supplied with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.
Fact: A consumer should definitely inspect their appraisal; there might be some questions or some worries about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double 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: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending institution.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. House inspectors will write a report that will express the condition of the house and its major components and possible damage.