Common myths about appraising
Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-supported sales. The law gives you the right to receive a copy of your finished report from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value needs to be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why there might be a differential in price.
Myth: The buyer or the seller often will have impact in the value of the property depending upon for whom the appraiser is working.
Fact: The appraised value of the home does not affect the payment of the appraiser; due to this, the appraiser has no pressured interest in the cost of the home. What this means is he will complete his business with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: There are certain methods that real estate appraisers use to show the opinion of value of a home, like the price per square foot.
Fact: Appraisers complete a full analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a strong economy - when the sales prices of houses in a given neighborhood are found to be appreciating by a certain percentage - the worth of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: All increase of price is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Allegheny County or Pittsburgh, PA?Contact our professional staff
Myth: The home's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the information required.
Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. Consumers must be supplied with a copy of the document through request because of the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending company is fine with the contents therein.
Fact: It is very important for consumers to check over a copy of their report so that they can double-check the accuracy of the report, in case they need to question its veracity. 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 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 proximity.
Myth: Appraisers are hired only to estimate home values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety 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 home inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal report. The appraiser forms an opinion of value in the appraisal process and resulting appraisal. A home inspector determines the condition of the property and its major components and reports these findings.