Appraisal myths & facts
By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported transactions. The law allows you to get a copy of your completed report from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: Market value should be similar to the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this often is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are exact examples of why this occurs.
Myth: The appraised value of a house will change depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount required to rebuild a house in-kind.
Myth: There are specific methods that appraisers use to show the opinion of value of a house, like the price per square foot.
Fact: There are many varied ways that an appraiser will use to make a full investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable homes.
Myth: In a powerful economy - when the values of houses in a given neighborhood are found to be appreciating by a particular percentage - the worth of individual homes in the area can be expected to rise by that same percentage.
Fact: Value appreciation of a certain house is always concluded on an individualized basis, factoring in information on comparable houses and other relevant considerations. It makes no difference whether the economy is good or poor.
Have other questions about appraisers, appraising or real estate in Oklahoma County or Oklahoma City, OK?Contact Xelloss Corp Appraisals
Myth: You can commonly tell what a home is worth simply by looking at the outside.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information necessary.
Myth: Because 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 report is theirs.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the appraisal. Home buyers must be supplied with a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending agency.
Fact: It is almost imperative for home buyers to check over a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, filled with useful and often-revealing data - including 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 estimate real estate property values in property sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and will provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The reason behind an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector assesses the condition of the property and its main components and reports these findings.