Myths and realities about real estate appraisals and appraisers…
Myth: Assessed value should be equal to market value.
Reality: It is possible that Utah, like most states, supports the common myth that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The appraised value of a property will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is ordered.
Myth: Market value should equate to replacement cost.
Reality: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. The dollar amount required to rebuild a property is what constitutes the replacement cost.
Myth: Certain methods, such as the price per square foot, are the ways appraisers use to arrive at the value of a house.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: When the economy is on the rise and the sales prices of homes are found to be rising by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.
Reality: An increase in value of a certain home must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself. It makes no difference whether the economy is excellent or terrible.
Myth: The property's outside is determinate of the expected price of the property; there is no need to do an interior appraisal.
Reality: There are a multitude of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your house, you own the produced appraisal report.
Reality: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the document. Home buyers must be provided with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal so long as it satisfies the needs of their lending group.
Reality: It is a very good idea for home buyers to go through a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains an exorbitant amount of information - including, but certainly 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: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending agency.
Reality: Appraisers can have many different qualifications and designations which allow them to perform 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: An appraisal report is the same as a home inspection report.
Reality: Appraisal reports are definitely not the same as a home inspection report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. A home inspector determines the condition of the property and its main components and reports their findings.
Contact us if you have any questions! Adam Coccimiglio 801 455 7696.
By law, an appraiser needs to be state-licensed to offer appraisals for federally-related transactions. Also by law, you have the ability to receive a copy of the finished appraisal from your lending agency. You are welcome to contact us if you have any concerns about the appraisal procedure.