Common myths about appraising
It is enforced by legal agencies that a real estate appraiser needs to be state-licensed to write appraisal reports for federally-related real estate sales in Illinois. The law allows you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
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. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are prime examples of why there might be a differential in price.
Myth: The buyer or the seller will have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: The opinion of value of the home does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the value of the house. This means that he will complete his business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: The replacement value of the home will be is on par with the market value.
Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the cost of a home.
Fact: An appraisal report is a collection of information based on the house's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can count on Sutherland Appraisal Services, Inc.'s appraisers to be professional in assessing this data.
Myth: When the economy is on the rise and the worth of properties are reported to be increasing by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.
Fact: Value increase of a specific house must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. It makes no difference if the economy is powerful or poor.
Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?Contact our professional staff
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 assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection obviously can't provide all of the information necessary.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be supplied with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it meets the requirements of their lending company.
Fact: A home buyer should definitely look through their appraisal; there could be some questions or some concerns about the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing 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: Appraisers are hired only to assess home values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a series 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: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The reason behind an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will compose a report that will show the condition of the home and its major components and possible damage.