Appraisal myths & facts
Legally, a real estate appraiser has to be state certified to produce substantiated appraisal reports for federally-backed transactions. Also by law, you have the ability to request a copy of the finished appraisal from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: While most states support the idea that assessed value equates estimated market value, this often is not the case. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why the price can vary.
Myth: The opinion of value of a property will be different depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equal replacement cost.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular house, with neither being under undue influence to buy or sell. The dollar amount required to reconstruct a house is what constitutes the replacement cost.
Myth: Certain methods, such as the price per square foot, are the methods appraisers use to determine the worth of a home.
Fact: There are many varied methods that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.
Myth: In a powerful economy - when the worth of homes in a given area are found to be appreciating by a certain percentage - the worth of individual houses in the vicinity can be expected to appreciate by that same percentage.
Fact: All appreciation of worth is on an individual basis, determined by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in La Crosse County or Holmen, WI?Contact us
Myth: The home's exterior is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: House 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 just viewing the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they own their appraisal report.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the appraisal. However, home buyers must be given a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lending institution is satisfied.
Fact: A home buyer should definitely inspect their report; there might be some questions or some concerns about the accuracy of the inspection that should be addressed. 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, comprised of helpful and often-revealing information - 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: Appraisals are ordered only to estimate building values in home sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection report.
Fact: Appraisal reports have almost nothing in common with a home inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting document. The task of a home inspector is to find the condition of the home and its major components, then write a report on these conclusions.