Appraisal myths debunked
Legally, a real estate appraiser must be state certified to perform legitimate appraisal reports for federally-related sales. You also have the right to receive a copy of the finished appraisal from your lender. Contact CMRE Appraisals Inc. if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser should be the same as the market value.
Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. At times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the property will vary.
Fact: The appraiser has no vested interest in the outcome of the report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will approximate replacement cost.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount required to do so would make up the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to conclude the value of a house.
Fact: An appraisal is an amalgamation of data concluded from the house's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can depend on CMRE Appraisals Inc.'s appraisers to be ethical in assessing this data.
Myth: As properties appreciate by a certain percentage - in a strong economic state - the properties nearby are figured to increase by the same amount.
Fact: All increase of value is on an individual basis, found by data on relevant elements and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
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Myth: You can commonly see what a house is worth simply by looking at the outside.
Fact: Home value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data necessary.
Myth: Considering that the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers must be supplied with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal report so long as it meets the needs of their lending institution.
Fact: A home buyer should definitely look through their appraisal report; there will probably be some questions or some concerns about the accuracy of the appraisal report that need to be addressed. 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 an incredible amount of information - 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 vicinity.
Myth: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. A home inspector assesses the condition of the property and its main components and reports their findings.