Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-backed transactions. The law gives you the right to get a copy of your finished appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value will always equate to market value.

Fact: It is probable that Oklahoma, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are excellent examples of why there might be a differential in price.

Myth: The value of a home will differ depending upon if the appraisal is conducted for the buyer or the seller.

Fact: The appraiser has no vested interest in the result of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the house were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the cost of a property.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to some facilities, the condition of the home and the value of recent comparable sales. You can count on OK Appraisals's appraisers to be forthright in assessing this data.

Myth: As houses appreciate by a specific percentage - in a robust economy - the homes around the appreciating properties are figured to appreciate by the same amount.

Fact: All appreciation of price is on a case-by-case basis, found by data on relevant elements and the data of comparable properties. This is true in good economic times as well as bad.

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Myth: The property's exterior is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: House worth is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data needed.

Myth: Since the consumer is the person who puts up 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: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. However, home buyers must be supplied with a copy of the report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even care about what the appraisal contains so long as their lending institution is satisfied.

Fact: Only if consumers look through a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an incredible amount of information - including, but certainly 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: The only reason someone would hire an appraiser is if a home needs its value estimated in a lender sales transaction.

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: You don't have to get an appraisal if you order a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal. The job of the appraiser is to form an opinion of value in the appraisal process and through producing the report. A home inspector determines the condition of the house and its main components and reports these findings.