Common myths about appraising

It is enforced by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-supported property purchases in California. The law gives you the right to acquire a copy of your finished report from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be similar to to market value.

Fact: It is probable that California, like most states, supports the suggestion that the assessed value equals the market value; however, this is not often the case. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

Myth: The buyer or the seller sometimes may have some pull in the cost of the property depending upon for whom the appraiser is working.

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

Myth: The replacement value of the property should be is on par with the market value.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any external party to buy or sell. Replacement cost is the dollar amount required to reconstruct a house in-kind.

Myth: There are specific ways that real estate appraisers use to show the value of a home, like the price per square foot.

Fact: There are many numerous 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 sales price of recently sold comparable homes.

Myth: In a powerful economy - when the prices of homes in a given neighborhood are reported to be appreciating by a certain percentage - the values of individual homes in the proximity can be expected to appreciate by that same percentage.

Fact: Cost increase of a specific property must be concluded on an individualized basis, factoring in information on comparable homes and other relevant elements. This is true in excellent economic times as well as bad.

Have other questions about appraisers, appraising or real estate in Los Angeles County or Alhambra, CA?

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Myth: Just looking at what the house looks like on the outside gives a good idea of its value.

Fact: Home worth is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found simply by inspecting the property from the outside.

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

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, consumers have to be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending company.

Fact: Only if home buyers look over a copy of their 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 report makes an excellent record for future reference, containing useful and often-revealing information - including, but 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.

Myth: Appraisers are hired only to estimate house values in house sales involving mortgage-lending transactions.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot 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: You don't have to get an appraisal if you have had a home inspection.

Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to form an opinion of value in the appraisal process and through writing the report. House inspectors will produce a report that will show the condition of the property and its major components and possible damage.