Appraisal myths debunked
It is enforced by the government that a real estate appraiser is required to be state-licensed to produce appraisals for federally-related property sales in New York. Also by law, you have the right to demand a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be the same as the market value.
Fact: It might be that New York, like most states, validates the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period of time.
Myth: The buyer or the seller sometimes may have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: The way market value is derived 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 purchase or sell. The dollar amount demanded to rebuild a property is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot, are the methods appraisers use to ascertain the cost of a property.
Fact: There are many numerous calculations that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.
Myth: In a robust economy - when the prices of properties in a given region are reported to be rising by a certain percentage - the prices of individual homes in the area can be expected to rise by that same percentage.
Fact: Value increase of a certain property has to be determined on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the house itself. It makes no difference whether the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Suffolk County or Nesconset, NY?Contact our professional staff
Myth: Just looking at what the home looks like on the outside gives an idea of its worth.
Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be derived just by viewing the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your home, you own the produced appraisal.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. Home buyers have to be provided with a copy of the document upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the requirements of their lender.
Fact: It is almost imperative for home buyers to peruse a copy of their report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, comprised of helpful and often-revealing information - 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its price 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: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will create a report that will explain the condition of the home and its major components and possible damage.