Appraisal myths & facts
It is required by legal agencies that an appraiser is required to be state-licensed to offer appraisals for federally-supported home sales in Florida. You have the ability to acquire a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser must be exactly the same as the market value.
Fact: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are perfect examples of why this occurs.
Myth: The value of a home will differ depending upon if the appraisal is provided for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.
Myth: The replacement cost of the property should be is on par with the market value.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under influence from any external group to buy or sell. If the property were rebuilt, the dollar amount needed to do so would make up the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the worth of a home.
Fact: There are many varied methods that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable properties.
Myth: When the economy is strong and the value of houses are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Fact: Value appreciation of a specific home is always determined on an individualized basis, factoring in information on comparable houses and other relevant specifications within the house itself. It makes no difference whether the economy is powerful or on the decline.
Have other questions about appraisers, appraising or real estate in Saint Johns County or Ponte Vedra Beach, FL?Contact us
Myth: Just looking at what the house looks like on the outside gives a good idea of its worth.
Fact: There are a multitude of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information needed.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their house, they legally own their appraisal report.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. By the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given it by their lending company.
Myth: Consumers need not worry about what is in their appraisal document so long as it satisfies the needs of their lending company.
Fact: Only if home buyers read a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, as it contains an incredible amount of data - 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: The only reason someone would hire an appraiser is if a house needs its cost estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The job of a home inspector is to approximate the condition of the property and its main components, then write a report on their conclusions.