Appraisal myths debunked
By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed sales. You also have the right to demand a copy of the completed appraisal from your lender. Contact Alaska Real Estate Appraisal if you have any concerns about the appraisal process.
Myth: Assessed value should always equate to market value.
Fact: While most states uphold the idea that assessed value equates estimated market value, this generally is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are perfect examples of why this occurs.
Myth: The value of a house will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is conducted.
Myth: The replacement cost of the house should be is on par with the market value.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific house, with neither being under duress to buy or sell. If the house were rebuilt, the dollar amount necessary to do so would form the replacement cost.
Myth: There are specific ways that appraisers use to find the opinion of value of a home, like the price per square foot.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a strong economy - when the values of houses in a given area are reported to be increasing by a particular percentage - the costs of individual properties in the proximity can be expected to rise by that same percentage.
Fact: Price increase of a certain house has to be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Matanuska Susitna County or Palmer, AK?Contact Alaska Real Estate Appraisal
Myth: The house's outside is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: There are a multitude of different factors that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by examining the property from the outside.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your house, you own the ordered appraisal report.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. However, consumers have to be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lender.
Fact: A consumer should definitely inspect their report; there may be some questions or some concerns with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its worth estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will express the condition of the house and its major components and possible damage.