Appraisal myths debunked

It is required by legal agencies that a real estate appraiser needs to be state-licensed to create appraisals for federally-supported real estate transactions in Louisiana. The law gives you the right to acquire a copy of your completed appraisal from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: Market value must be equivocal to the assessed value of the property.

Fact: This usually isn't true; most states do support the concept 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 houses in the area have not been reassessed for an extended time.

Myth: The buyer or the seller often will have some pull in the cost of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should equate to replacement cost.

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under influence from any external group to purchase or sell. The dollar amount required to reconstruct a property is what shows the replacement cost.

Myth: Appraisers use a formula, like a specific price per square foot, to figure out the worth of a property.

Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent worth of comparable houses.

Myth: As properties increase their worth by a certain percentage - in a robust economic state - the properties around the appreciating properties are figured to increase by the same amount.

Fact: All appreciation of worth is on a one-on-one basis, concluded by data on relevant elements and the data of comparable houses. It makes no difference if the economy is robust or poor.

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Myth: The home's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just inspecting the home from the exterior.

Myth: Because the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the appraisal. Home buyers have to be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even worry about what the appraisal report contains so long as their lending company is fine with the contents therein.

Fact: It is very important for consumers to go through a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an 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 region.

Myth: The only reason someone would hire an appraiser is if a property needs its cost estimated 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 variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: You don't need to get an appraisal if you order a home inspection.

Fact: A home inspection report serves a completely different purpose than an appraisal report. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. House inspectors will create a report that will show the condition of the house and its major components and possible damage.