Appraisal myths debunked

By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported purchases. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact CMS Appraisals Inc if you have any questions about the appraisal process.

Myth: Market value will always be similar to the assessed value of the property.

Fact: While most states uphold the concept that assessed value is equal to estimated market value, this usually is not the case. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.

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 price of the home does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the home. What this means is he will render job with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any outside party to buy or sell. The dollar amount needed to reconstruct a house is what forms the replacement cost.

Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to come to the price of a house.

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.

Myth: As houses appreciate by a certain percentage - in a strong economy - the houses around the appreciating properties are expected to appreciate by the same amount.

Fact: All increase of worth is on a one-on-one basis, found by information on relevant elements and the data of comparable properties. It makes no difference whether the economy is excellent or on the decline.

Myth: The property's exterior is determinate of the actual value of the house; there is no need to do an interior inspection.

Fact: House value is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at the home from the exterior.

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

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lending company.

Fact: A home buyer should definitely look through their appraisal; there will probably be some questions or some worries about the accuracy of the report that should 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 an incredible amount of information - including, but certainly 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.