Appraisal myths debunked

By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed sales. The law gives you the right to get a copy of your completed report from your lender after it has been produced. Contact OK Appraisals if you have any concerns about the appraisal process.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the opinion of value of the home will vary.

Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.

Myth: Market value will approximate 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 home without being under influence from any outside party to purchase or sell. The dollar amount needed to reconstruct a house is what forms the replacement cost.

Myth: Certain methods, such as the price per square foot, are the ways appraisers use to determine the value of a home.

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 value of recent comparable sales. You can count on OK Appraisals's staff to be professional in assessing this information.

Myth: In a strong economy - when the sales prices of properties in a given neighborhood are reported to be increasing by a particular percentage - the worth of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: Worth appreciation of a specific property has to be determined on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the house itself. This is true in fair economic times as well as poor.

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

Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the home from the outside.

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

Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. However, home buyers have to be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the report contains so long as their lending institution is satisfied.

Fact: Only if home buyers read 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 appraisal can serve as a record for the future, as it contains an exorbitant amount 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 vicinity.

Myth: Appraisals are ordered only to assess building values in home sales involving mortgage-lending deals.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: You don't have to get an appraisal if you have had a home inspection.

Fact: An appraisal does not fulfill the same purpose as an inspection report. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. House inspectors will create a report that will express the condition of the property and its major components and possible damage.