Common myths about appraising
By law, an appraiser must be state-licensed to offer appraisals for federally-related transactions. Also by law, you are entitled to request a copy of the finished appraisal from your lender. Contact Smith Appraisal Services if you have any questions about the appraisal procedure.
Myth: Market value will be similar to the assessed value of the property.
Fact: It might be that Wisconsin, like most states, supports the common myth that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the Belleville have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller can have leverage in the value of the home depending upon for whom the appraiser is working.
Fact: The appraised value of the property does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the property. Obviously, he will render task with impartiality and independence regardless for whom the appraisal is produced.
Myth: Any time market value is established, it should be similar to the replacement cost of the property.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under duress to buy or sell. Replacement value is the dollar amount needed to rebuild a home in-kind.
Myth: Specific formulae, like the price per square foot, are the methods appraisers use to ascertain the value of a property.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is strong and the value of properties are found to be increasing by a certain percentage, the other properties in the area can be expected to appreciate based on that same percentage.
Fact: Any value at which an appraiser concludes concerning a specific house is always individualized, based on certain factors found from the data of comparable houses and other specifications within the property itself. This is true in strong economic times as well as bad.
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Myth: You can often tell what a property is worth simply by looking at the outside.
Fact: There are a multitude of different factors that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by viewing the property from the exterior.
Myth: Because the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with it by their lending agency.
Myth: Home buyers need not care about what is in their appraisal report so long as it exceeds the necessities of their lending agency.
Fact: Only if consumers examine a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a valuable record for future reference, filled with 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 area.
Myth: The only reason someone would order an appraisal is if a house needs its worth estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. The job of a home inspector is to assess the condition of the house and its major components, then provide a report on their conclusions.