Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to create substantiated real estate appraisals for federally-related transactions. Also by law, you are entitled to receive a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser must be equivalent to the market value.
Fact: It might be that North Carolina, like most states, validates the common myth that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period.
Myth: The opinion of value of a property will be different depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a house is what shows the replacement cost.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to arrive at the price of a house.
Fact: Appraisers make a comprehensive 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 houses.
Myth: In a strong economy - when the prices of properties 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: Cost appreciation of a specific home has to be determined on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact James Earp Appraisal Service
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data required.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given one by their lender.
Myth: There's no point for home buyers to even care about what the report contains so long as their lending agency is fine with the contents therein.
Fact: Only if consumers check out a copy of their appraisal report can they ensure 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 appraisal can double as a record for the future, as it contains a great deal 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 area.
Myth: Appraisals are ordered only to assess real estate property values in home sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you get a home inspection.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. The point of a home inspector is to find the condition of the property and its major components, then write a report on these conclusions.