Appraisal myths debunked

It is enforced by law that an appraiser needs to be state-licensed to create appraisal reports for federally-related property sales in Illinois. Also by law, you are allowed to request a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser must be the same as the market value.

Fact: While most states uphold the concept that assessed value equates estimated market value, this generally is not the case. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged period.

Myth: The appraised value of a home will vary depending upon whether the appraisal is produced for the buyer or the seller.

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

Myth: The replacement value of the home is always is on par with the market value.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any external party to buy or sell. If the home were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: There are specific ways that real estate appraisers use to determine the value of a home, like the price per square foot.

Fact: An appraisal is an assertion of information based on the home's size, location, proximity to specific facilities, the condition of the home and the worth of recent comparable sales. You can count on Sutherland Appraisal Services, Inc.'s appraisers to be ethical in assessing this data.

Myth: In a robust economy - when the costs of properties in a given neighborhood are found to be appreciating by a certain percentage - the values of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Worth increase of a specific house must be concluded on an individualized basis, factoring in data on comparable houses and other relevant elements. It makes no difference whether the economy is excellent or on the decline.

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Myth: The property's exterior is determinate of the actual price of the home; it is unnecessary to do an interior inspection.

Fact: To find an accurate value beyond all doubt, an appraiser must examine the property 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 required.

Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your home, you own the produced appraisal.

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the appraisal. However, home buyers must be supplied with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the necessities of their lending agency.

Fact: It is a very good idea for home buyers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an report that could be useful to the consumer in the future, such as 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 estimate of the price of a property during a sales transaction involving a lending agency.

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

Myth: An appraisal is the same as a home inspection report.

Fact: A home inspection report serves a completely different purpose than an appraisal report. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. House inspectors will create a report that will express the condition of the house and its major components and possible damage.