Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to produce substantiated appraisal reports for federally-backed transactions. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser will be exactly the same as the 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. At times when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the Elkins Park have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a home will vary depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement value of the property will be is on par with the market value.
Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any outside party to purchase or sell. If the house were rebuilt, the dollar amount needed to do so would make up the replacement cost.
Myth: Specific formulae, such as the price per square foot of the property, are the ways appraisers use to determine the cost of a property.
Fact: There are many differing processes that an appraiser will use to make a comprehensive analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable homes.
Myth: When the economy is doing well and the cost of homes are reported to be appreciating by a certain percentage, the other properties in the area can be expected to appreciate based on that same percentage.
Fact: All appreciation of value is on an individual basis, determined by data on relevant considerations and the data of comparable homes. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Montgomery County or Elkins Park, Pennsylvania?Contact us
Myth: The house's exterior is determinate of the actual value of the house; there is no need to do an interior inspection.
Fact: Property value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the house from the outside.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the document. Consumers have to be provided with a version of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their document so long as it exceeds the necessities of their lending agency.
Fact: It is a very good idea for consumers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, containing helpful 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending agency.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. An appraiser forms an opinion of value in the appraisal process and resulting report. The purpose of a home inspector is to approximate the condition of the home and its major components, then compose a report on their findings.