Common myths about appraising
Legally, a real estate appraiser has to be state certified to perform substantiated real estate appraisals for federally-backed transactions. The law entitles you to get a copy of your completed report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser should be equivalent to the market value.
Fact: It is possible that Oklahoma, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not always true. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.
Myth: The buyer or the seller sometimes may have an influence in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraised value of the house does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the value of the house. This means that he will conduct task with impartiality and independence regardless for whom the appraisal is created.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under influence from any external group to buy or sell. The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: There are certain methods that appraisers use to find the cost of a property, such as the price per square foot.
Fact: There are many different formulae that an appraiser will use to make a comprehensive analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.
Myth: In a robust economy - when the costs of houses in a given area are found to be rising by a certain percentage - the worth of individual properties in the proximity can be expected to rise by that same percentage.
Fact: Worth increase of a specific house must be determined on an individualized basis, factoring in data on comparable houses and other relevant considerations. This is true in fair economic times as well as bad.
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Myth: The house's exterior is determinate of the actual price of the home; there is no need to do an interior inspection.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they legally own their appraisal.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be provided with one by their lending agency.
Myth: Home buyers need not be concerned with what is in their report so long as it satisfies the necessities of their lending agency.
Fact: A consumer should definitely inspect their appraisal report; there may be some questions or some concerns about the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that could 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a house during a sales transaction involving a lending agency.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is the same as a home inspection report.
Fact: A home inspection serves a completely different purpose than an appraisal. The appraiser finds an opinion of value in the appraisal process and resulting report. The job of a home inspector is to approximate the condition of the property and its main components, then write a report on their findings.