Appraisal myths debunked
It is enforced by law that an appraiser is required to be state-licensed to create appraisals for federally-supported property transactions in Utah. You are also entitled by law to acquire a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should equate to the replacement cost of the property.
Fact: Market value is arrived at through 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 cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to determine the cost of a property.
Fact: There are many varied ways that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable homes.
Myth: When the economy is on the rise and the worth of homes are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: Any value at which an appraiser arrives concerning a particular home is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Iron County or Cedar City, UT?Contact our professional staff
Myth: Just examining what the house looks like on the outside gives an idea of its cost.
Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by viewing the house from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal report.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal report so long as it meets the necessities of their lending group.
Fact: Only if home buyers look at a copy of their report 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 appraisal makes a near perfect record for future reference, filled with helpful and often-revealing information - 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: The only reason someone would hire an appraiser is if a property needs its cost assessed in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The reason behind an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the appraisal. The task of a home inspector is to determine the condition of the property and its main components, then write a report on their findings.