Common myths about appraising

Legally, an appraiser needs to be state certified to perform substantiated appraisal reports for federally-backed transactions. The law entitles you to acquire a copy of your finished report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value will always be the same as to market value.

Fact: It could be that New York, like most states, supports the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.

Myth: Depending on if the appraisal is done for the buyer or the seller, the opinion of value of the property will vary.

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.

Myth: Market value will equate to replacement cost.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. Replacement value is the dollar amount needed to rebuild a property in-kind.

Myth: Appraisers use a calculation, such as a certain price per square foot, to figure out the cost of a property.

Fact: Appraisers complete a full analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.

Myth: When the economy is on the rise and the value of homes are found to be increasing by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.

Fact: All increase of worth is on a case-by-case basis, concluded by data on relevant conditions and the data of comparable properties. This is true in strong economic times as well as poor.

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Myth: Just seeing what the house looks like on its exterior gives an excellent idea of its cost.

Fact: Property value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data necessary.

Myth: Considering that the consumer is the person 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 is theirs.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. However, consumers have to be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending agency is satisfied.

Fact: A consumer should definitely inspect their appraisal; there will probably be some questions or some worries with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an appraisal report that should be useful to the consumer in the future, such as 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 hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.

Fact: Ordering an appraisal can fulfill a variety of wants 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: An appraisal is no different than a home inspection.

Fact: A home inspection has a completely different purpose than an appraisal. The reason behind an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal. The job of a home inspector is to find the condition of the home and its major components, then provide a report on their conclusions.