Common myths about appraising
It is required by legal agencies that an appraiser needs to be state-licensed to produce appraisals for federally-supported real estate purchases in Illinois. Also by law, you are entitled to receive a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: It might be that Illinois, like most states, supports the suggestion that the assessed value equals the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are excellent examples of why there might be a differential in price.
Myth: The value of a house will vary depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will approximate replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to ascertain the value of a property.
Fact: An appraisal report is an assertion of data based on the home's size, location, proximity to certain facilities, the condition of the home and the price of recent comparable sales. You can rely on Sutherland Appraisal Services, Inc.'s staff to be honest in assessing this data.
Myth: In a strong economy - when the prices of houses in a given neighborhood are found to be appreciating by a particular percentage - the worth of individual houses in the area can be expected to rise by that same percentage.
Fact: Price increase of a certain home must be determined on an individualized basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?Contact our professional staff
Myth: The house's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.
Fact: To conclude an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the house from the exterior.
Myth: Since the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with one by their lender.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.
Fact: Only if home buyers look through a copy of their report can they verify 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 report can serve as a record for the future, containing an incredible 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 proximity.
Myth: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending deals.
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: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection has a completely different purpose than an appraisal. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the house and its major components and reports their findings.