Appraisal myths debunked
Legally, a real estate appraiser is required to be state certified to produce substantiated appraisal reports for federally-supported sales. You are also entitled by law to acquire a copy of the completed appraisal from your lender. Contact Appraise Colorado Inc if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Fact: It might be that Colorado, like most states, supports the suggestion that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are excellent examples of why this occurs.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the property will vary.
Fact: There is no personal interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: The replacement value of the property should be is on par with the market value.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: There are certain ways that appraisers use to show the value of a house, such as the price per square foot.
Fact: Appraisers complete a full analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.
Myth: In a strong economy - when the values of houses in a given area are found to be appreciating by a particular percentage - the costs of individual properties in the area can be expected to rise by that same percentage.
Fact: Any price at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors pulled from the information of comparable homes and other specifications within the property itself. This is true in strong economic times as well as bad.
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Myth: The property's outside is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Fact: There are a number of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just looking at the home from the exterior.
Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers have to be supplied with a copy of the report upon written request due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the appraisal report contains so long as their lender is satisfied.
Fact: A home buyer should definitely look through their report; there might be some questions or some concerns with the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing useful and often-revealing data - 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 area.
Myth: Appraisers are hired only to estimate house values in property sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and often do perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. The point of a home inspector is to approximate the condition of the home and its main components, then produce a report on these conclusions.