Common myths about appraising
Legally, a real estate appraiser is required to be state certified to write substantiated appraisal reports for federally-related sales. Also by law, you are allowed to request a copy of the completed report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Assessed value should be equal 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. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The appraised value of a house will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome 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 house is always is on par with the market value.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside party to buy or sell. The dollar amount required to reconstruct a home is what forms the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the value of a home.
Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can count on Robert Ensminger Appraisers & Ensminger Auctioneers's staff to be ethical in assessing this information.
Myth: In a strong economy - when the sales prices of houses in a given county are found to be appreciating by a certain percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Price increase of a certain property must be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the property itself. It makes no difference if the economy is strong or bad.
Have other questions about appraisers, appraising or real estate in Dauphin County or Harrisburg, PA?Contact us
Myth: You can usually see what a home is worth simply by looking at the exterior.
Fact: To find an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.
Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the document. However, consumers have to be supplied with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending company.
Fact: It is almost imperative for consumers to peruse a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, filled with useful and often-revealing data - including 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: 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 lender.
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.
Fact: Appraisal reports are definitely not the same as a home inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will show the condition of the property and its major components and possible damage.