Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related transactions. The law gives you the right to acquire a copy of your finished appraisal report from your lender after it has been produced. Contact Appraisal House, Inc. if you have any questions about the appraisal procedure.

Myth: Market value will always be similar to the assessed value of the property.

Fact: It could be that Florida, like most states, supports the common myth that the assessed value equates to the market value; however, this is not always true. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an prolonged period.

Myth: The buyer or the seller may have leverage in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraised value of the house does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the opinion of value of the house. What this means is he will provide business with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. Replacement value is the dollar amount required to rebuild a house in-kind.

Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the worth of a property.

Fact: There are many varied formulae that an appraiser will use to make an in-depth analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable houses.

Myth: As properties appreciate by a specific percentage - in a strong economic state - the houses around the appreciating properties are figured to increase by the same amount.

Fact: Worth increase of a certain house is always determined on a case-by-case basis, factoring in data on comparable homes and other relevant elements. It doesn't matter if the economy is doing well or declining.

Myth: The property's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: To determine an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be derived just by inspecting the home from the outside.

Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance real estate, you own the ordered appraisal report.

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the appraisal. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given one by their lender.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.

Fact: It is a very good idea for home buyers to peruse a copy of their appraisal so that they can double-check the accuracy of the report, in case they need to question its veracity. 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 a great deal 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.