Common myths about appraising
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed purchases. Also by law, you have the ability to receive a copy of the finished appraisal from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value generally will be similar to to market value.
Fact: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case. There are times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller sometimes may have some pull in the cost of the home depending upon for whom the appraiser is working.
Fact: The value of the house does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the cost of the home. What this means is he will render services with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Market value should be the same as replacement cost.
Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. The replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the cost of a house.
Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to specific facilities, the condition of the property and the worth of recent comparable sales. You can depend on Sutherland Appraisal Services, Inc.'s appraisers to be professional in assessing this data.
Myth: In a robust economy - when the sales prices of properties in a given county are found to be appreciating by a particular percentage - the worth of individual houses in the proximity can be expected to rise by that same percentage.
Fact: All increase of worth is on a one-on-one basis, determined by data on relevant elements and the data of comparable houses. It makes no difference whether the economy is strong or terrible.
Have other questions about appraisers, appraising or real estate in Dupage County or Naperville, IL?Contact us
Myth: You can usually tell what a property is worth simply by looking at the outside.
Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection definitely can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance real estate, you own the ordered appraisal.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers have to be provided with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal report so long as it meets the needs of their lending group.
Fact: A home buyer should definitely inspect their appraisal report; there might be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, filled with helpful and often-revealing information - including 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: The only reason someone would hire an appraiser is if a home needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you get a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. The task of a home inspector is to find the condition of the house and its major components, then compose a report on these findings.