Appraisal myths debunked
It is required by law that a real estate appraiser is required to be state-licensed to perform appraisals for federally-related real estate transactions in Oklahoma. You are also entitled by law to demand a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always equate to market value.
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 remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller will have some pull in the value of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome 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: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific house, with neither being under pressure to buy or sell. The replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: There are specific ways that real estate appraisers use to show the opinion of value of a property, such as the price per square foot.
Fact: Appraisers make a full analysis of all factors in consideration to the worth of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: When the economy is on the rise and the sales prices of homes are reported to be appreciating by a certain percentage, the other homes in the vicinity can be expected to rise based on that same percentage.
Fact: Value increase of a certain home has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant elements. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate?Contact Krise Appraising
Myth: You can commonly tell what a home is worth simply by looking at the exterior.
Fact: There are a multitude of different factors that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by inspecting the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. Consumers must be given a version of the document upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lender.
Fact: Only if consumers read a copy of their appraisal 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. There is a wealth of data stored in an appraisal report that will probably 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending agency.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you order a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The appraiser finds an opinion of value in the appraisal process and resulting appraisal. A home inspector assesses the condition of the home and its major components and reports these findings.