Common myths about appraising
By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed purchases. Also by law, you are entitled to receive a copy of the finished appraisal report from your lender. Contact James Earp Appraisal Service if you have any concerns about the appraisal process.
Myth: Market value must be similar to the assessed value of the property.
Fact: It could be that North Carolina, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not often the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the home will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should equal the replacement cost of the home.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside group to purchase or sell. Replacement value is the dollar amount required to reconstruct a home in-kind.
Myth: There are specific ways that appraisers use to find the value of a property, like the price per square foot.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a powerful economy - when the costs of properties in a given area are reported to be increasing by a particular percentage - the costs of individual properties in the area can be expected to rise by that same percentage.
Fact: Any worth at which an appraiser arrives concerning a specific property is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact James Earp Appraisal Service
Myth: You can commonly tell what a property is worth simply by looking at the exterior.
Fact: Property worth is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information needed.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their home, they own their appraisal report.
Fact: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the appraisal. Home buyers have to be given a copy of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal report so long as it exceeds the necessities of their lending company.
Fact: It is very important for consumers to look at a copy of their appraisal so that they can verify the accuracy of the document, 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 exorbitant amount of data - 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 area.
Myth: Appraisers are hired only to assess real estate property values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide 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 property inspection serves the same purpose as an appraisal.
Fact: A home inspection report has a completely different purpose than an appraisal. An appraiser concludes on an opinion of value in the appraisal process and resulting document. The task of a home inspector is to find the condition of the property and its main components, then write a report on their findings.