Appraisal myths & facts
It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to create appraisal reports for federally-supported home sales in Pennsylvania. You have the ability to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: It might be that Pennsylvania, like most states, supports the idea that the assessed value equates to the market value; however, this is not often the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the Pittsburgh have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the value of the property will vary.
Fact: The cost of the home does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the value of the home. What this means is he will render task with impartiality and independence regardless for whom the appraisal is provided.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under undue influence to buy or sell. The dollar amount necessary to reconstruct a home is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the cost of a home.
Fact: An appraisal is an assertion of data concluded from the property's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can count on Nordquist Appraisal LLC's staff to be ethical in assessing this information.
Myth: In a robust economy - when the worth of homes in a given area are found to be appreciating by a certain percentage - the values of individual properties in the area can be expected to increase by that same percentage.
Fact: Cost increase of a certain property has to be determined on an individualized basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is doing well or declining.
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Myth: Just looking at what the house looks like on the outside gives an idea of its worth.
Fact: House value is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just examining the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your home, you own the produced appraisal.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Consumers must be provided with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even worry about what the report contains so long as their lender is satisfied.
Fact: It is almost imperative for consumers to read a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, since it contains an incredible amount of information - 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 estimate building values in house sales involving mortgage-lending transactions.
Fact: Hiring an appraiser can fulfill a variety of necessities 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: An appraisal is no different than a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection report. The purpose of an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the report. House inspectors will produce a report that will show the condition of the house and its major components and possible damage.