Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-backed purchase. Also by law, you are entitled to request a copy of the finished appraisal from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser will be equivalent to the market value.
Fact: While most states support the suggestion that assessed value equates estimated market value, this generally is not the case. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a house will vary depending upon if the appraisal is produced for the buyer or the seller.
Fact: The price of the home does not affect the payment of the appraiser; as a result, the appraiser has no pressured interest in the opinion of value of the home. Obviously, he will provide services with impartiality and independence regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to come to the value of a house.
Fact: Appraisers make a detailed analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent worth of comparable properties.
Myth: In a strong economy - when the prices of properties in a given county are found to be increasing by a certain percentage - the values of individual properties in the area can be expected to rise by that same percentage.
Fact: Any price at which an appraiser concludes in regards to a particular house is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the property itself. It makes no difference if the economy is excellent or poor.
Have other questions about appraisers, appraising or real estate in Oklahoma County or Oklahoma City, OK?Contact us
Myth: You can commonly tell what a home is worth simply by looking at the outside.
Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your home, you own the ordered appraisal report.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. However, home buyers have to be supplied with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the necessities of their lending agency.
Fact: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the analysis that need to be addressed. 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, since it contains a great deal of data - 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its cost estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. A home inspector analyzes the condition of the property and its main components and reports these findings.