Appraisal myths & facts
It is required by law that an appraiser needs to be state-licensed to offer appraisals for federally-supported real estate sales in Pennsylvania. You have the ability to request a copy of the completed report from your lending agency. Contact Nordquist Appraisal LLC if you have any questions about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: It is probable that Pennsylvania, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The buyer or the seller may have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. Replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the value of a home.
Fact: Appraisers make an exhaustive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As properties increase their worth by a certain percentage - in a strong economic state - the homes nearby are figured to appreciate by the same amount.
Fact: All appreciation of value is on a case-by-case basis, determined by data on relevant elements and the data of comparable houses. This is true in strong economic times as well as bad.
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Myth: You can usually see what a property is worth simply by looking at the exterior.
Fact: There are a number of different factors that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just examining the property from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their home, they own their appraisal report.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given it by their lending company.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the requirements of their lending agency.
Fact: Only if consumers check out 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. Also, the report makes an invaluable record for future reference, containing useful 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: Appraisers are hired only to estimate real estate property values in property sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied 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: An appraisal is no different than a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector determines the condition of the building and its major components and reports their findings.