Appraisal myths & facts
Legally, a real estate appraiser must be state certified to produce substantiated real estate appraisals for federally-related sales. Also by law, you are entitled to receive a copy of the completed appraisal report from your lending agency. Contact Alaska Real Estate Appraisal if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is ordered.
Myth: Market value will be the same as replacement cost.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. The dollar amount required to reconstruct a house is what forms the replacement cost.
Myth: There are specific ways that appraisers use to determine the cost of a house, such as the price per square foot.
Fact: An appraisal report is a collection of information based on the home's size, location, proximity to some facilities, the condition of the property and the value of recent comparable sales. You can rely on Alaska Real Estate Appraisal's staff to be professional in assessing this information.
Myth: When the economy is on the rise and the value of houses are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: All increase of value is on an individual basis, found by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Matanuska Susitna County or Wasilla, AK?Contact us
Myth: You can generally see what a home is worth simply by looking at the exterior.
Fact: Home worth is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just examining the property from the exterior.
Myth: Since the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with it by their lending agency.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lender is satisfied.
Fact: A home buyer should definitely inspect their report; there may be some questions or some worries about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing 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 vicinity.
Myth: Appraisers are hired only to assess house values in property sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no reason to get an appraisal if you get a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The purpose of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the building and its main components and reports these findings.