Appraisal myths & facts
It is required by law that a real estate appraiser must be state-licensed to create appraisals for federally-supported real estate purchases in Alaska. The law gives you the right to acquire a copy of your finished appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: It is probable that Alaska, like most states, supports the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller sometimes may have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: The cost of the home does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the cost of the property. Obviously, he will render job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Market value will equal replacement cost.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount required to reconstruct a house in-kind.
Myth: Specific formulae, like the price per square foot of the property, are what appraisers use to ascertain the cost of a property.
Fact: An appraisal report is an assertion of information based on the house's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can rely on Alaska Real Estate Appraisal's appraisers to be forthright in assessing this information.
Myth: In a strong economy - when the sales prices of properties in a given region are found to be appreciating by a certain percentage - the costs of individual homes in the area can be expected to appreciate by that same percentage.
Fact: Worth increase of a specific home must be concluded on an individualized basis, factoring in data on comparable homes and other relevant specifications within the home itself. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Matanuska Susitna County or Wasilla, AK?Contact Alaska Real Estate Appraisal
Myth: Just looking at what the house looks like on the outside gives a good idea of its worth.
Fact: Home worth is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply examining the property from the outside.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with it by their lending agency.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the needs of their lending company.
Fact: Only if home buyers examine a copy of their appraisal 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 report makes an invaluable record for future reference, containing helpful 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the cost of a house during a sales transaction involving a lender.
Fact: Depending upon their qualifications and designations, appraisers can and will perform a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. The reason behind an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector determines the condition of the property and its major components and reports these findings.