Appraisal myths debunked
It is required by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related real estate sales in Michigan. Also by law, you have the right to demand a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value generally will be the same as to market value.
Fact: While most states support the idea that assessed value equates estimated market value, this commonly is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.
Myth: The appraised value of a house will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The cost of the house does not affect the payment of the appraiser; due to this, the appraiser has no preconceived interest in the opinion of value of the property. This means that he will complete his job with impartiality and independence regardless for whom the appraisal is created.
Myth: Market value will equate to replacement cost.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside party to buy or sell. Replacement cost is the dollar amount required to rebuild a home in-kind.
Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a property, like the price per square foot.
Fact: Appraisers make a detailed analysis of all factors pertaining to the price of a house, including its location, condition, size, proximity to facilities and recent costs of comparable homes.
Myth: When the economy is robust and the worth of properties are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Any price at which an appraiser concludes in regards to a specific house is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Oakland County or Oakland County, MI?Contact us
Myth: You can often find what a house is worth simply by looking at the outside.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by viewing the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to buy or refinance real estate, you own the provided appraisal report.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal. Home buyers have to be supplied with a version of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the appraisal report contains so long as their lending agency is satisfied.
Fact: It is very important for home buyers to peruse a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains a great deal 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending company.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a variety 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 completely different than a home inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.