Appraisal myths & facts
By law, an appraiser must be state-licensed to perform appraisals for federally-supported sales. Also by law, you are allowed to receive a copy of the completed appraisal report from your lender. Contact James Earp Appraisal Service if you have any concerns about the appraisal process.
Myth: Assessed value generally will be similar to to market value.
Fact: While most states support the idea that assessed value equates estimated market value, this generally is not the case. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the Raleigh have not been reassessed for years or more, it may vary wildly.
Myth: The opinion of value of a home will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Market value should approximate replacement cost.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount required to reconstruct a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the value of a house.
Fact: There are many different formulae that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.
Myth: In a powerful economy - when the sales prices of houses in a given county are found to be rising by a certain percentage - the costs of individual houses in the vicinity can be expected to appreciate by that same percentage.
Fact: All appreciation of worth is on an individual basis, found by information on relevant conditions and the data of comparable houses. This is true in fair economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact our professional staff
Myth: Just examining what the property looks like on its exterior gives an idea of its worth.
Fact: House value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by viewing the property from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be provided with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lender.
Fact: It is a very good idea for consumers to peruse a copy of their appraisal so that they can double-check 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. Also, the appraisal report makes an invaluable record for future reference, filled with helpful and often-revealing 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 proximity.
Myth: Appraisers are hired only to assess building values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you have had a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal report. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. The point of a home inspector is to approximate the condition of the property and its main components, then produce a report on their findings.