Common myths about appraising
By law, an appraiser must be state-licensed to perform appraisals for federally-backed sales. Also by law, you are allowed to demand a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Fact: While most states uphold the concept that assessed value is equal to estimated market value, this usually is not the case. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller will have an influence in the value of the house depending upon for whom the appraiser is working.
Fact: The cost of the property does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the value of the property. This means that he will provide business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: Certain methods, such as the price per square foot, are the ways appraisers use to come to the price of a home.
Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to specific facilities, the condition of the property and the worth of recent comparable sales. You can depend on James Earp Appraisal Service's appraisers to be ethical in assessing this information.
Myth: In a powerful economy - when the prices of properties in a given area are reported to be appreciating by a particular percentage - the values of individual homes in the vicinity can be expected to increase by that same percentage.
Fact: Any value at which an appraiser concludes concerning a certain property is always individualized, based on certain factors pulled from the information of comparable homes and other considerations within the home itself. It makes no difference whether the economy is good or poor.
Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?Contact us
Myth: Just examining what the property looks like on the outside gives an excellent idea of its cost.
Fact: There are a multitude of different factors that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just inspecting the house from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they own their appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. However, consumers have to be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the report contains so long as their lending institution is satisfied.
Fact: Only if home buyers look at a copy of their appraisal 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 appraisal report makes an excellent record for future reference, containing helpful and often-revealing 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its cost estimated in a lender-based sales transaction.
Fact: Appraisers can have many different 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: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser decides upon an opinion of value in the appraisal process and resulting document. The task of a home inspector is to approximate the condition of the property and its main components, then compose a report on these findings.