Common myths about appraising
Legally, a real estate appraiser needs to be state certified to perform legitimate real estate appraisals for federally-related transactions. You also have the right to acquire a copy of the completed appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Fact: It is probable that Louisiana, like most states, supports the common myth that the assessed value is no different from the market value; however, this is not always true. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will be the same as replacement cost.
Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any outside group to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the value of a property, such as the price per square foot.
Fact: There are many differing processes that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.
Myth: In a strong economy - when the prices of houses in a given county are reported to be increasing by a particular percentage - the worth of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: Price appreciation of a certain home has to be concluded on an individualized basis, factoring in data on comparable properties and other relevant considerations. It makes no difference if the economy is strong or on the decline.
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Myth: The house's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.
Fact: Home value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by inspecting the property from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their home, they own their appraisal.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. However, home buyers have to be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their appraisal so long as it satisfies the requirements of their lending group.
Fact: A home buyer should definitely inspect their document; there will probably be some questions or some worries about 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. There is an incredible amount of data contained in an report that can be useful to the home buyer 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 proximity.
Myth: Appraisers are hired only to estimate house values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector analyzes the condition of the property and its main components and reports these findings.