Appraisal myths & facts
Legally, an appraiser must be state certified to create legitimate appraisal reports for federally-supported sales. The law allows you to receive a copy of your completed appraisal from your lending agency after it has been produced. Contact Berge Company Appraisers if you have any questions about the appraisal procedure.
Myth: Assessed value should be equal to 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 reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller may have some pull in the value of the home depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any external party to purchase or sell. The replacement cost is the dollar amount needed to reconstruct a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the worth of a property.
Fact: An appraisal is an assertion of data concluded from the house's size, location, proximity to specific facilities, the condition of the home and the price of recent comparable sales. You can depend on Berge Company Appraisers's appraisers to be professional in assessing this data.
Myth: When the economy is robust and the value of houses are reported to be appreciating by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.
Fact: Any value at which an appraiser arrives concerning a certain home is always personalized, based on certain factors found from the information of comparable homes and other considerations within the house itself. This is true in good economic times as well as bad.
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Myth: The house's outside is determinate of the actual price of the home; there is no need to do an interior appraisal.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these variables can be derived simply by viewing the house from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their home, they legally own their appraisal.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. However, home buyers have to be given a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even worry about what the report contains so long as their lender is fine with the contents therein.
Fact: Only if home buyers examine a copy of their appraisal report can they ensure 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 an excellent record for future reference, containing helpful 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 area.
Myth: The only reason someone would hire an appraiser is if a house needs its worth estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Fact: An appraisal does not serve the same purpose as an inspection report. The task of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The point of a home inspector is to find the condition of the property and its main components, then create a report on their conclusions.
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